Man Yan Lee became the CEO of Lee & Man Chemical Company Limited (HKG:746) in 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

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How Does Man Yan Lee’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Lee & Man Chemical Company Limited has a market cap of HK$4.2b, and is paying total annual CEO compensation of HK$17m. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at HK$1.1m. We examined companies with market caps from HK$1.6b to HK$6.3b, and discovered that the median CEO total compensation of that group was HK$1.9m.

Thus we can conclude that Man Yan Lee receives more in total compensation than the median of a group of companies in the same market, and of similar size to Lee & Man Chemical Company 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.

The graphic below shows how CEO compensation at Lee & Man Chemical has changed from year to year.

Is Lee & Man Chemical Company Limited Growing?

Over the last three years Lee & Man Chemical Company Limited has grown its earnings per share (EPS) by an average of 57% per year (using a line of best fit). In the last year, its revenue is up 30%.

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. 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 Lee & Man Chemical Company Limited Been A Good Investment?

Boasting a total shareholder return of 147% over three years, Lee & Man Chemical Company 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…

We compared the total CEO remuneration paid by Lee & Man Chemical Company Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Lee & Man Chemical 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.

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 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. Thank you for reading.