Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In 2013 Ning Li was appointed CEO of Viva China Holdings Limited (HKG:8032). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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.
How Does Ning Li's Compensation Compare With Similar Sized Companies?
Our data indicates that Viva China Holdings Limited is worth HK$4.3b, and total annual CEO compensation is HK$11m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at HK$11m. When we examined a selection of companies with market caps ranging from HK$1.6b to HK$6.3b, we found the median CEO total compensation was HK$2.3m.
It would therefore appear that Viva China Holdings Limited pays Ning Li more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Viva China Holdings, below.
Is Viva China Holdings Limited Growing?
On average over the last three years, Viva China Holdings Limited has grown earnings per share (EPS) by 119% each year (using a line of best fit). It achieved revenue growth of 28% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Viva China Holdings Limited Been A Good Investment?
Given the total loss of 16% over three years, many shareholders in Viva China Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount Viva China Holdings Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Viva China Holdings (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.