Should You Worry About Cogobuy Group's (HKG:400) CEO Pay?
In 2014 Jeffrey Kang was appointed CEO of Cogobuy Group (HKG:400). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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 Cogobuy Group
How Does Jeffrey Kang's Compensation Compare With Similar Sized Companies?
According to our data, Cogobuy Group has a market capitalization of HK$1.9b, and paid its CEO total annual compensation worth CN¥1.0m over the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth CN¥1.0m. We examined companies with market caps from CN¥686m to CN¥2.7b, and discovered that the median CEO total compensation of that group was CN¥2.0m.
A first glance this seems like a real positive for shareholders, since Jeffrey Kang is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Cogobuy Group, below.
Is Cogobuy Group Growing?
Cogobuy Group has reduced its earnings per share by an average of 34% a year, over the last three years (measured with a line of best fit). Its revenue is down 19% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Cogobuy Group Been A Good Investment?
Since shareholders would have lost about 87% over three years, some Cogobuy Group 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 appears that Cogobuy Group remunerates its CEO below most similar sized companies.
The compensation paid to Jeffrey Kang is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. Shareholders may want to check for free if Cogobuy Group insiders are buying or selling shares.
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.
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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