Yat Kin Wai has been the CEO of KPa-BM Holdings Limited (HKG:2663) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Yat Kin Wai's Compensation Compare With Similar Sized Companies?
According to our data, KPa-BM Holdings Limited has a market capitalization of HK$153m, and pays its CEO total annual compensation worth HK$3.5m. (This number is for the twelve months until March 2019). That's actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at HK$2.5m. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO total compensation was HK$1.8m.
It would therefore appear that KPa-BM Holdings Limited pays Yat Kin Wai more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at KPa-BM Holdings has changed from year to year.
Is KPa-BM Holdings Limited Growing?
KPa-BM Holdings Limited has reduced its earnings per share by an average of 7.4% a year, over the last three years (measured with a line of best fit). Its revenue is up 9.7% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. 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 might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has KPa-BM Holdings Limited Been A Good Investment?
Since shareholders would have lost about 10% over three years, some KPa-BM Holdings Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount KPa-BM Holdings Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! Shareholders may want to check for free if KPa-BM Holdings insiders are buying or selling shares.
If you want to buy a stock that is better than KPa-BM Holdings, this free list of high return, low debt companies is a great place to look.
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