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Does Goodbaby International Holdings Limited's (HKG:1086) CEO Pay Compare Well With Peers?

Simply Wall St

In 2016 Martin Pos was appointed CEO of Goodbaby International Holdings Limited (HKG:1086). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Goodbaby International Holdings

How Does Martin Pos's Compensation Compare With Similar Sized Companies?

Our data indicates that Goodbaby International Holdings Limited is worth HK$2.3b, and total annual CEO compensation is HK$24m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$13m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$784m to HK$3.1b. The median total CEO compensation was HK$2.2m.

Thus we can conclude that Martin Pos receives more in total compensation than the median of a group of companies in the same market, and of similar size to Goodbaby International Holdings Limited. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Goodbaby International Holdings has changed over time.

SEHK:1086 CEO Compensation, August 8th 2019

Is Goodbaby International Holdings Limited Growing?

Goodbaby International Holdings Limited has reduced its earnings per share by an average of 19% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 21%.

Sadly for shareholders, earnings per share are actually down, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has Goodbaby International Holdings Limited Been A Good Investment?

Since shareholders would have lost about 58% over three years, some Goodbaby International Holdings Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at Goodbaby International Holdings Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.

Just as bad, share price gains for investors have failed to materialize, over the same period. Some might well form the view that the CEO is paid too generously! Shareholders may want to check for free if Goodbaby International Holdings insiders are buying or selling shares.

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.