Man Chun Chan became the CEO of AMS Public Transport Holdings Limited (HKG:77) in 2005, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for AMS Public Transport Holdings
How Does Total Compensation For Man Chun Chan Compare With Other Companies In The Industry?
Our data indicates that AMS Public Transport Holdings Limited has a market capitalization of HK$171m, and total annual CEO compensation was reported as HK$4.4m for the year to March 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at HK$3.95m constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$268k. Accordingly, our analysis reveals that AMS Public Transport Holdings Limited pays Man Chun Chan north of the industry median. Furthermore, Man Chun Chan directly owns HK$2.4m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$3.9m | HK$3.9m | 91% |
| Other | HK$408k | HK$408k | 9% |
| Total Compensation | HK$4.4m | HK$4.4m | 100% |
Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. AMS Public Transport Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at AMS Public Transport Holdings Limited's Growth Numbers
Over the last three years, AMS Public Transport Holdings Limited has shrunk its earnings per share by 12% per year. It saw its revenue drop 20% over the last year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has AMS Public Transport Holdings Limited Been A Good Investment?
With a three year total loss of 44% for the shareholders, AMS Public Transport Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As we noted earlier, AMS Public Transport Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for AMS Public Transport Holdings you should be aware of, and 1 of them is concerning.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
When trading AMS Public Transport Holdings or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
New: Manage All Your Stock Portfolios in One Place
We've created the ultimate portfolio companion for stock investors, and it's free.
• Connect an unlimited number of Portfolios and see your total in one currency
• Be alerted to new Warning Signs or Risks via email or mobile
• Track the Fair Value of your stocks
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
About SEHK:77
AMS Public Transport Holdings
An investment holding company, provides franchised public light bus (PLB) and residents’ bus transportation services in Hong Kong.
Good value with imperfect balance sheet.
