Wallace Lau became the CEO of Ever Harvest Group Holdings Limited (HKG:1549) in 2016. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Wallace Lau's Compensation Compare With Similar Sized Companies?
According to our data, Ever Harvest Group Holdings Limited has a market capitalization of HK$140m, and paid its CEO total annual compensation worth HK$1.6m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at HK$1.5m. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.7m.
That means Wallace Lau 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.
You can see, below, how CEO compensation at Ever Harvest Group Holdings has changed over time.
Is Ever Harvest Group Holdings Limited Growing?
Over the last three years Ever Harvest Group Holdings Limited has shrunk its earnings per share by an average of 58% per year (measured with a line of best fit). In the last year, its revenue is down 3.1%.
Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. 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 Ever Harvest Group Holdings Limited Been A Good Investment?
Given the total loss of 59% over three years, many shareholders in Ever Harvest Group Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Wallace Lau is paid around the same as most CEOs of similar size companies.
After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Few would argue that it's wise for the company to pay any more, before returns improve. So you may want to check if insiders are buying Ever Harvest Group Holdings shares with their own money (free access).
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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