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Is China Partytime Culture Holdings Limited (HKG:1532) Overpaying Its CEO?

Simply Wall St

Xin Fu Lin has been the CEO of China Partytime Culture Holdings Limited (HKG:1532) since 2017. First, this article will compare CEO compensation with compensation at similar sized companies. 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 method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for China Partytime Culture Holdings

How Does Xin Fu Lin's Compensation Compare With Similar Sized Companies?

According to our data, China Partytime Culture Holdings Limited has a market capitalization of HK$192m, and paid its CEO total annual compensation worth CN¥642k over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥382k. We took a group of companies with market capitalizations below CN¥1.4b, and calculated the median CEO total compensation to be CN¥1.6m.

Most shareholders would consider it a positive that Xin Fu Lin takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see, below, how CEO compensation at China Partytime Culture Holdings has changed over time.

SEHK:1532 CEO Compensation, January 28th 2020

Is China Partytime Culture Holdings Limited Growing?

On average over the last three years, China Partytime Culture Holdings Limited has shrunk earnings per share by 109% each year (measured with a line of best fit). Its revenue is down 31% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 China Partytime Culture Holdings Limited Been A Good Investment?

Given the total loss of 75% over three years, many shareholders in China Partytime Culture Holdings Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

It appears that China Partytime Culture Holdings Limited remunerates its CEO below most similar sized companies.

Shareholders should note that compensation for Xin Fu Lin is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling China Partytime Culture Holdings (free visualization of insider trades).

If you want to buy a stock that is better than China Partytime Culture Holdings, 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.

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.