How Should Investors React To Amax International Holdings Limited’s (HKG:959) CEO Pay?
In 2012 Ng Wai Ng was appointed CEO of Amax International Holdings Limited (HKG:959). 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. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Amax International Holdings
How Does Ng Wai Ng’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Amax International Holdings Limited has a market cap of HK$141m, and is paying total annual CEO compensation of HK$4.3m. (This figure is for the year to 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at HK$3.8m. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO compensation in that group is HK$1.7m.
As you can see, Ng Wai Ng is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Amax 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, below, how CEO compensation at Amax International Holdings has changed over time.
Is Amax International Holdings Limited Growing?
Over the last three years Amax International Holdings Limited has shrunk its earnings per share by an average of 19% per year. It achieved revenue growth of 539% over the last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching.
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 Amax International Holdings Limited Been A Good Investment?
Since shareholders would have lost about 73% over three years, some Amax International Holdings Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
We compared total CEO remuneration at Amax International Holdings Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Shareholders may wish to consider further research. Although we don’t think the CEO pay is too high, it is probably more on the generous side of things. Whatever your view on compensation, you might want to check if insiders are buying or selling Amax International Holdings shares (free trial).
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
