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Is BBI Life Sciences Corporation (HKG:1035) Excessively Paying Its CEO?

Simply Wall St

In 2014 Luojia Wang was appointed CEO of BBI Life Sciences Corporation (HKG:1035). 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 process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for BBI Life Sciences

How Does Luojia Wang's Compensation Compare With Similar Sized Companies?

Our data indicates that BBI Life Sciences Corporation is worth HK$1.3b, and total annual CEO compensation was reported as CN¥518k for the year to December 2018. Notably, the salary of CN¥518k is the vast majority of the CEO compensation. We examined companies with market caps from CN¥706m to CN¥2.8b, 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 Luojia Wang 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.

The graphic below shows how CEO compensation at BBI Life Sciences has changed from year to year.

SEHK:1035 CEO Compensation, December 4th 2019

Is BBI Life Sciences Corporation Growing?

BBI Life Sciences Corporation has increased its earnings per share (EPS) by an average of 14% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 24%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has BBI Life Sciences Corporation Been A Good Investment?

BBI Life Sciences Corporation has served shareholders reasonably well, with a total return of 25% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

BBI Life Sciences Corporation is currently paying its CEO below what is normal for companies of its size.

Since the business is growing, many would argue this suggests the pay is modest. The total shareholder return might not be amazing, but that doesn't mean that Luojia Wang is paid too much. It's great to see a company that pays its CEO reasonably, even while growing. But it would be nice if insiders were also buying shares. So you may want to check if insiders are buying BBI Life Sciences shares with their own money (free access).

Important note: BBI Life Sciences 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.

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.

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. Thank you for reading.