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Alvin Liu became the CEO of A8 New Media Group Limited (HKG:800) in 2000. 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. 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.
How Does Alvin Liu's Compensation Compare With Similar Sized Companies?
Our data indicates that A8 New Media Group Limited is worth HK$551m, and total annual CEO compensation is CN¥1.3m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at CN¥120k. We took a group of companies with market capitalizations below CN¥1.4b, and calculated the median CEO total compensation to be CN¥1.5m.
So Alvin Liu receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at A8 New Media Group has changed from year to year.
Is A8 New Media Group Limited Growing?
A8 New Media Group Limited has reduced its earnings per share by an average of 62% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 7.8%.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. 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, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has A8 New Media Group Limited Been A Good Investment?
Since shareholders would have lost about 56% over three years, some A8 New Media Group Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
Remuneration for Alvin Liu is close enough to the median pay for a CEO of a similar sized company .
The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. Whatever your view on compensation, you might want to check if insiders are buying or selling A8 New Media Group shares (free trial).
If you want to buy a stock that is better than A8 New Media Group, this free list of high return, low debt companies is a great place to look.
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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.