Is Applied Development Holdings Limited's (HKG:519) CEO Pay Fair?
Chi Ping Yuen has been the CEO of Applied Development Holdings Limited (HKG:519) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Applied Development Holdings
How Does Chi Ping Yuen's Compensation Compare With Similar Sized Companies?
Our data indicates that Applied Development Holdings Limited is worth HK$491m, and total annual CEO compensation was reported as HK$1.1m for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at HK$810k. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO total compensation was HK$1.8m.
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.
You can see, below, how CEO compensation at Applied Development Holdings has changed over time.
Is Applied Development Holdings Limited Growing?
Applied Development Holdings Limited has reduced its earnings per share by an average of 87% a year, over the last three years (measured with a line of best fit). Its revenue is up 153% over last year.
The reduction in earnings per share, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Applied Development Holdings Limited Been A Good Investment?
With a three year total loss of 69%, Applied Development Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
It appears that Applied Development Holdings Limited remunerates its CEO below most similar sized companies.
It's well worth noting that while Chi Ping Yuen is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. I am not concerned by the CEO compensation, but it would be good to see improved performance before pay increases. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Applied Development Holdings (free visualization of insider trades).
Important note: Applied Development Holdings 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.
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