Does Universal Technologies Holdings Limited’s (HKG:1026) CEO Pay Matter?
In 2013 Cheuk Chau was appointed CEO of Universal Technologies Holdings Limited (HKG:1026). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Universal Technologies Holdings
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How Does Cheuk Chau’s Compensation Compare With Similar Sized Companies?
According to our data, Universal Technologies Holdings Limited has a market capitalization of HK$657m, and pays its CEO total annual compensation worth HK$2.2m. (This is based on the year to 2017). It is worth noting that the CEO compensation consists almost entirely of the salary, worth HK$2.1m. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO compensation to be HK$1.7m.
It would therefore appear that Universal Technologies Holdings Limited pays Cheuk Chau more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration 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 Universal Technologies Holdings has changed over time.
Is Universal Technologies Holdings Limited Growing?
Over the last three years Universal Technologies Holdings Limited has shrunk its earnings per share by an average of 28% per year. Its revenue is down -5.4% over last year.
Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Universal Technologies Holdings Limited Been A Good Investment?
With a three year total loss of 40%, Universal Technologies Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
We compared the total CEO remuneration paid by Universal Technologies Holdings Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Universal Technologies Holdings (free visualization of insider trades).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
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 editorial-team@simplywallst.com.
