Here's Why Shareholders May Want To Be Cautious With Increasing NWS Holdings Limited's (HKG:659) CEO Pay Packet

Simply Wall St ·  11/04/2023 06:05

Key Insights

  • NWS Holdings' Annual General Meeting to take place on 10th of November
  • Total pay for CEO Eric Ma includes HK$13.5m salary
  • Total compensation is 89% above industry average
  • Over the past three years, NWS Holdings' EPS grew by 59% and over the past three years, the total shareholder return was 72%

Under the guidance of CEO Eric Ma, NWS Holdings Limited (HKG:659) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 10th of November. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for NWS Holdings

Comparing NWS Holdings Limited's CEO Compensation With The Industry

Our data indicates that NWS Holdings Limited has a market capitalization of HK$37b, and total annual CEO compensation was reported as HK$15m for the year to June 2023. That's a fairly small increase of 6.9% over the previous year. Notably, the salary which is HK$13.5m, represents most of the total compensation being paid.

On examining similar-sized companies in the Hong Kong Industrials industry with market capitalizations between HK$16b and HK$50b, we discovered that the median CEO total compensation of that group was HK$8.1m. Accordingly, our analysis reveals that NWS Holdings Limited pays Eric Ma north of the industry median.

Component20232022Proportion (2023)
Salary HK$14m HK$13m 89%
Other HK$1.7m HK$1.7m 11%
Total CompensationHK$15m HK$14m100%

Speaking on an industry level, nearly 58% of total compensation represents salary, while the remainder of 42% is other remuneration. According to our research, NWS Holdings has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

SEHK:659 CEO Compensation November 3rd 2023

A Look at NWS Holdings Limited's Growth Numbers

NWS Holdings Limited has seen its earnings per share (EPS) increase by 59% a year over the past three years. In the last year, its revenue is up 45%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has NWS Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 72% over three years, NWS Holdings Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for NWS Holdings that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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