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In 1996 T. Leung was appointed CEO of Euro Tech Holdings Company Limited (NASDAQ:CLWT). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. 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 T. Leung’s Compensation Compare With Similar Sized Companies?
Our data indicates that Euro Tech Holdings Company Limited is worth US$6.9m, and total annual CEO compensation is US$195k. (This number is for the twelve months until 2016). It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$195k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO compensation in that group is US$300k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Euro Tech Holdings has changed over time.
Is Euro Tech Holdings Company Limited Growing?
Euro Tech Holdings Company Limited has increased its earnings per share (EPS) by an average of 112% a year, over the last three years (using a line of best fit). Its revenue is down -12% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Euro Tech Holdings Company Limited Been A Good Investment?
Euro Tech Holdings Company Limited has not done too badly by shareholders, with a total return of 6.8%, over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
It looks like Euro Tech Holdings Company Limited pays its CEO less than similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest T. Leung is overcompensated.
It’s good to see reasonable payment of the CEO, even while the business improves. But it would be nice if insiders were also buying shares. So you may want to check if insiders are buying Euro Tech Holdings shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.