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Is King's Flair International (Holdings) Limited's (HKG:6822) CEO Paid At A Competitive Rate?

Simply Wall St

In 2012 Alex Wong was appointed CEO of King's Flair International (Holdings) Limited (HKG:6822). 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for King's Flair International (Holdings)

How Does Alex Wong's Compensation Compare With Similar Sized Companies?

Our data indicates that King's Flair International (Holdings) Limited is worth HK$826m, and total annual CEO compensation was reported as HK$9.1m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at HK$5.0m. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.7m.

As you can see, Alex Wong is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean King's Flair International (Holdings) Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at King's Flair International (Holdings), below.

SEHK:6822 CEO Compensation, October 21st 2019

Is King's Flair International (Holdings) Limited Growing?

On average over the last three years, King's Flair International (Holdings) Limited has shrunk earnings per share by 5.4% each year (measured with a line of best fit). Its revenue is up 2.5% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has King's Flair International (Holdings) Limited Been A Good Investment?

King's Flair International (Holdings) Limited has generated a total shareholder return of 33% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

We compared the total CEO remuneration paid by King's Flair International (Holdings) Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. And shareholder returns are decent but not great. So we doubt many shareholders would consider the CEO pay to be particularly modest! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling King's Flair International (Holdings) (free visualization of insider trades).

Important note: King's Flair International (Holdings) may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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. Thank you for reading.