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Is Hang Sang (Siu Po) International Holding Company Limited's (HKG:3626) CEO Salary Justified?

Simply Wall St

Samson Fung has been the CEO of Hang Sang (Siu Po) International Holding Company Limited (HKG:3626) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Hang Sang (Siu Po) International Holding

How Does Samson Fung's Compensation Compare With Similar Sized Companies?

According to our data, Hang Sang (Siu Po) International Holding Company Limited has a market capitalization of HK$114m, and paid its CEO total annual compensation worth HK$2.2m over the year to June 2019. Notably, the salary of HK$2.1m is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.8m.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Hang Sang (Siu Po) International Holding stands. Talking in terms of the sector, salary represented approximately 57% of total compensation out of all the companies we analysed, while other remuneration made up 43% of the pie. Hang Sang (Siu Po) International Holding is focused on going down a more traditional approach and is paying a higher proportion of compensation through salary, as compared to non-salary benefits.

That means Samson Fung receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. The graphic below shows how CEO compensation at Hang Sang (Siu Po) International Holding has changed from year to year.

SEHK:3626 CEO Compensation March 31st 2020

Is Hang Sang (Siu Po) International Holding Company Limited Growing?

On average over the last three years, Hang Sang (Siu Po) International Holding Company Limited has shrunk earnings per share by 35% each year (measured with a line of best fit). Its revenue is down 17% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Hang Sang (Siu Po) International Holding Company Limited Been A Good Investment?

With a three year total loss of 68%, Hang Sang (Siu Po) International Holding Company Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Samson Fung is paid around the same as most CEOs of similar size companies.

The company isn't growing EPS, and shareholder returns have been disappointing. Suffice it to say, we don't think the CEO is underpaid! Shifting gears from CEO pay for a second, we've spotted 4 warning signs for Hang Sang (Siu Po) International Holding you should be aware of, and 1 of them makes us a bit uncomfortable.

If you want to buy a stock that is better than Hang Sang (Siu Po) International Holding, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.