Yinhong Xiao is the CEO of TravelSky Technology Limited (HKG:696). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for TravelSky Technology

How Does Yinhong Xiao's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that TravelSky Technology Limited has a market cap of HK$42b, and reported total annual CEO compensation of CN¥844k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥276k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from CN¥28b to CN¥85b, and the median CEO total compensation was CN¥4.6m.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 72% of total compensation represents salary, while the remainder of 28% is other remuneration. Non-salary compensation represents a greater slice of the remuneration pie for TravelSky Technology, in sharp contrast to the overall sector.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance. The graphic below shows how CEO compensation at TravelSky Technology has changed from year to year.

Is TravelSky Technology Limited Growing?

On average over the last three years, TravelSky Technology Limited has seen earnings per share (EPS) move in a favourable direction by 1.6% each year (using a line of best fit). It achieved revenue growth of 9.3% over the last year.

I'm not particularly impressed by the revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. It could be important to check this free visual depiction of what analysts expect for the future.

Has TravelSky Technology Limited Been A Good Investment?

Since shareholders would have lost about 18% over three years, some TravelSky Technology 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...

It looks like TravelSky Technology Limited pays its CEO less than similar sized companies.

Yinhong Xiao receives relatively low remuneration compared to similar sized companies. But the company isn't exactly firing on all cylinders, and returns over three years are not good. Many shareholders would probably like to see improvements, but our analysis does not suggest that CEO compensation is too generous. Shifting gears from CEO pay for a second, we've picked out 1 warning sign for TravelSky Technology that investors should be aware of in a dynamic business environment.

Important note: TravelSky Technology 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.

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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