Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Daniel Wong has been the CEO of Midland IC&I Limited (HKG:459) since 2011. First, this article will compare CEO compensation with compensation at similar sized companies. 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.
How Does Daniel Wong's Compensation Compare With Similar Sized Companies?
According to our data, Midland IC&I Limited has a market capitalization of HK$343m, and pays its CEO total annual compensation worth HK$4.7m. (This is based on the year to December 2018). That's below the compensation, last year. We think total compensation is more important but we note that the CEO salary is lower, at HK$1.4m. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO total compensation in that group is HK$1.7m.
Thus we can conclude that Daniel Wong receives more in total compensation than the median of a group of companies in the same market, and of similar size to Midland IC&I Limited. However, this doesn't necessarily mean the pay 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 a visual representation of the CEO compensation at Midland IC&I, below.
Is Midland IC&I Limited Growing?
Midland IC&I Limited has increased its earnings per share (EPS) by an average of 66% a year, over the last three years (using a line of best fit). Its revenue is down -1.4% over last year.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Midland IC&I Limited Been A Good Investment?
With a three year total loss of 54%, Midland IC&I Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Midland IC&I Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Midland IC&I.
Important note: Midland IC&I 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.