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Does Cathay International Holdings Limited's (LON:CTI) CEO Pay Reflect Performance?

Simply Wall St

Jin-Yi Lee has been the CEO of Cathay International Holdings Limited (LON:CTI) since 2010. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

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Check out our latest analysis for Cathay International Holdings

How Does Jin-Yi Lee's Compensation Compare With Similar Sized Companies?

Our data indicates that Cathay International Holdings Limited is worth UK£34m, and total annual CEO compensation is US$130k. (This number is for the twelve months until December 2017). It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$551k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$315k.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.

You can see a visual representation of the CEO compensation at Cathay International Holdings, below.

LSE:CTI CEO Compensation, May 22nd 2019

Is Cathay International Holdings Limited Growing?

On average over the last three years, Cathay International Holdings Limited has shrunk earnings per share by 9.5% each year (measured with a line of best fit). It saw its revenue drop -27% over the 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. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Cathay International Holdings Limited Been A Good Investment?

With a three year total loss of 48%, Cathay International 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...

Cathay International Holdings Limited is currently paying its CEO below what is normal for companies of its size.

The compensation paid to Jin-Yi Lee is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. Whatever your view on compensation, you might want to check if insiders are buying or selling Cathay International Holdings shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.