Is Sun.King Power Electronics Group Limited (HKG:580) Excessively Paying Its CEO?

Simply Wall St

In 2012 Renyuan Gong was appointed CEO of Sun.King Power Electronics Group Limited (HKG:580). 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Sun.King Power Electronics Group

How Does Renyuan Gong's Compensation Compare With Similar Sized Companies?

According to our data, Sun.King Power Electronics Group Limited has a market capitalization of HK$2.2b, and paid its CEO total annual compensation worth CN¥916k over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥600k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CN¥701m to CN¥2.8b. The median total CEO compensation was CN¥2.0m.

A first glance this seems like a real positive for shareholders, since Renyuan Gong is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see a visual representation of the CEO compensation at Sun.King Power Electronics Group, below.

SEHK:580 CEO Compensation, February 27th 2020

Is Sun.King Power Electronics Group Limited Growing?

Sun.King Power Electronics Group Limited has increased its earnings per share (EPS) by an average of 11% a year, over the last three years (using a line of best fit). It achieved revenue growth of 14% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's a real positive to see this sort of growth in a single year. That suggests a healthy and 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 Sun.King Power Electronics Group Limited Been A Good Investment?

Since shareholders would have lost about 9.8% over three years, some Sun.King Power Electronics Group Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

It appears that Sun.King Power Electronics Group Limited remunerates its CEO below most similar sized companies.

Considering the underlying business is growing earnings, this would suggest the pay is modest. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we would not say that Renyuan Gong is generously paid, it would be good to see an improvement in business performance before too an increase in pay. In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. Whatever your view on compensation, you might want to check if insiders are buying or selling Sun.King Power Electronics Group shares (free trial).

If you want to buy a stock that is better than Sun.King Power Electronics Group, this free list of high return, low debt companies is a great place to look.

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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