Hongzhou Liu became the CEO of China Electronics Huada Technology Company Limited (HKG:85) in 2016. 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.
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How Does Hongzhou Liu's Compensation Compare With Similar Sized Companies?
According to our data, China Electronics Huada Technology Company Limited has a market capitalization of HK$1.4b, and pays its CEO total annual compensation worth HK$1.8m. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at HK$750k. When we examined a selection of companies with market caps ranging from HK$785m to HK$3.1b, we found the median CEO total compensation was HK$1.7m.
That means Hongzhou Liu receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at China Electronics Huada Technology has changed from year to year.
Is China Electronics Huada Technology Company Limited Growing?
Over the last three years China Electronics Huada Technology Company Limited has shrunk its earnings per share by an average of 18% per year (measured with a line of best fit). In the last year, its revenue is up 16%.
Sadly for shareholders, earnings per share are actually down, over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. 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, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has China Electronics Huada Technology Company Limited Been A Good Investment?
Since shareholders would have lost about 62% over three years, some China Electronics Huada Technology Company Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
Remuneration for Hongzhou Liu is close enough to the median pay for a CEO of a similar sized company .
Returns have been disappointing and the company is not growing its earnings per share. Suffice it to say, we don't think the CEO is underpaid! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at China Electronics Huada Technology.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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