The CEO of China Ludao Technology Company Limited (HKG:2023) is Yuerong Yu. 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. 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.
How Does Yuerong Yu's Compensation Compare With Similar Sized Companies?
According to our data, China Ludao Technology Company Limited has a market capitalization of HK$516m, and paid its CEO total annual compensation worth CN¥1.1m over the year to December 2019. That's a modest increase of 6.0% on the prior year year. Notably, the salary of CN¥1.1m is the vast majority of the CEO compensation. 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.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where China Ludao Technology stands. Speaking on an industry level, we can see that nearly 86% of total compensation represents salary, while the remainder of 14% is other remuneration. China Ludao Technology pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. 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 China Ludao Technology has changed from year to year.
Is China Ludao Technology Company Limited Growing?
Over the last three years China Ludao Technology Company Limited has seen earnings per share (EPS) move in a positive direction by an average of 1.6% per year (using a line of best fit). In the last year, its revenue is up 1.9%.
I'd prefer higher revenue growth, but the modest improvement in EPS is good. Considering these factors I'd say performance has been pretty decent, though not amazing. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has China Ludao Technology Company Limited Been A Good Investment?
Since shareholders would have lost about 26% over three years, some China Ludao Technology Company Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
China Ludao Technology Company Limited is currently paying its CEO below what is normal for companies of its size.
It's well worth noting that while Yuerong Yu is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. I am not concerned by the CEO compensation, but it would be good to see improved performance before pay increases. CEO compensation is an important area to keep your eyes on, but we've also identified 2 warning signs for China Ludao Technology (1 is potentially serious!) that you should be aware of before investing here.
Important note: China Ludao Technology 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.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.