The CEO of Major Holdings Limited (HKG:1389) is Joseph Leung. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Joseph Leung's Compensation Compare With Similar Sized Companies?
Our data indicates that Major Holdings Limited is worth HK$216m, and total annual CEO compensation was reported as HK$1.7m for the year to March 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$1.2m. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO total compensation was HK$1.8m.
So Joseph Leung receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Major Holdings has changed over time.
Is Major Holdings Limited Growing?
Major Holdings Limited has reduced its earnings per share by an average of 52% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 33%.
Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. 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 shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Major Holdings Limited Been A Good Investment?
Given the total loss of 95% over three years, many shareholders in Major Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Joseph Leung is paid around the same as most CEOs of similar size companies.
The company isn't growing EPS, and shareholder returns have been disappointing. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. So you may want to check if insiders are buying Major Holdings shares with their own money (free access).
Important note: Major 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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