Ren Hor Wong is the CEO of N1 Holdings Limited (ASX:N1H), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing N1 Holdings Limited's CEO Compensation With the industry
According to our data, N1 Holdings Limited has a market capitalization of AU$6.4m, and paid its CEO total annual compensation worth AU$414k over the year to June 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at AU$368.0k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$281m, we found that the median total CEO compensation was AU$652k. Accordingly, N1 Holdings pays its CEO under the industry median. Furthermore, Ren Hor Wong directly owns AU$3.8m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 78% of total compensation out of all the companies we analyzed, while other remuneration made up 22% of the pie. N1 Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
N1 Holdings Limited's Growth
Over the last three years, N1 Holdings Limited has shrunk its earnings per share by 23% per year. Its revenue is up 3.5% over the last year.
Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has N1 Holdings Limited Been A Good Investment?
Since shareholders would have lost about 50% over three years, some N1 Holdings Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we noted earlier, N1 Holdings pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.
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. In our study, we found 3 warning signs for N1 Holdings you should be aware of, and 2 of them don't sit too well with us.
Switching gears from N1 Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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