Does InvesTech Holdings Limited's (HKG:1087) CEO Salary Reflect Performance?
Ringo Chan has been the CEO of InvesTech Holdings Limited (HKG:1087) since 2016. 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.
View our latest analysis for InvesTech Holdings
How Does Ringo Chan's Compensation Compare With Similar Sized Companies?
According to our data, InvesTech Holdings Limited has a market capitalization of HK$302m, and paid its CEO total annual compensation worth CN¥2.4m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥2.2m. We examined a group of similar sized companies, with market capitalizations of below CN¥1.4b. The median CEO total compensation in that group is CN¥1.5m.
As you can see, Ringo Chan is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean InvesTech Holdings Limited is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at InvesTech Holdings has changed over time.
Is InvesTech Holdings Limited Growing?
Over the last three years InvesTech Holdings Limited has grown its earnings per share (EPS) by an average of 7.4% per year (using a line of best fit). Its revenue is down 13% over last year.
I would argue that the lack of revenue growth in the last year is less than ideal, but I'm happy with the EPS growth. 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 InvesTech Holdings Limited Been A Good Investment?
Given the total loss of 89% over three years, many shareholders in InvesTech Holdings Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared total CEO remuneration at InvesTech 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. Although we'd stop short of calling it inappropriate, we think the CEO compensation 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 InvesTech Holdings shares (free trial).
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 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.
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