Why Man Yue Technology Holdings' (HKG:894) CEO Pay Matters

This article will reflect on the compensation paid to Eugene Chan who has served as CEO of Man Yue Technology Holdings Limited (HKG:894) since 2008. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Man Yue Technology Holdings

How Does Total Compensation For Eugene Chan Compare With Other Companies In The Industry?

Our data indicates that Man Yue Technology Holdings Limited has a market capitalization of HK$195m, and total annual CEO compensation was reported as HK$4.8m for the year to December 2019. We note that's a small decrease of 4.5% on last year. Notably, the salary which is HK$4.60m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.9m. Accordingly, our analysis reveals that Man Yue Technology Holdings Limited pays Eugene Chan north of the industry median. What's more, Eugene Chan holds HK$1.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. Man Yue Technology Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Man Yue Technology Holdings Limited's Growth

Over the last three years, Man Yue Technology Holdings Limited has shrunk its earnings per share by 34% per year. Its revenue is up 13% over the last year.

Few shareholders would be pleased to read that EPS have declined. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Man Yue Technology Holdings Limited Been A Good Investment?

With a three year total loss of 71% for the shareholders, Man Yue Technology Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Eugene receives almost all of their compensation through a salary. As we noted earlier, Man Yue Technology Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which makes us a bit uncomfortable) in Man Yue Technology Holdings we think you should know about.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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