Dongfeng Huang became the CEO of Birmingham Sports Holdings Limited (HKG:2309) in 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Birmingham Sports Holdings
How Does Dongfeng Huang’s Compensation Compare With Similar Sized Companies?
Our data indicates that Birmingham Sports Holdings Limited is worth HK$2.3b, and total annual CEO compensation was reported as HK$3.2m for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at HK$2.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$775m to HK$3.1b. The median total CEO compensation was HK$2.2m.
Next, let’s break down remuneration compositions to understand how the industry and company compare with each other. Talking in terms of the sector, salary represented approximately 88% of total compensation out of all the companies we analysed, while other remuneration made up 12% of the pie. So it seems like there isn’t a significant difference between Birmingham Sports Holdings and the broader market, in terms of salary allocation in the overall compensation package.
It would therefore appear that Birmingham Sports Holdings Limited pays Dongfeng Huang 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. You can see, below, how CEO compensation at Birmingham Sports Holdings has changed over time.
Is Birmingham Sports Holdings Limited Growing?
Over the last three years Birmingham Sports Holdings Limited has seen earnings per share (EPS) move in a positive direction by an average of 24% per year (using a line of best fit). In the last year, its revenue is up 7.4%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Birmingham Sports Holdings Limited Been A Good Investment?
Since shareholders would have lost about 21% over three years, some Birmingham Sports Holdings Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Birmingham Sports Holdings Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On the other hand returns to investors over the same period have probably disappointed many. Considering positive per-share earnings movement, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. CEO compensation is an important area to keep your eyes on, but we’ve also identified 5 warning signs for Birmingham Sports Holdings (3 are a bit unpleasant!) that you should be aware of before investing here.
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.
If you spot an error that warrants correction, please contact the editor at [email protected] 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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