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Patty Tsai became the CEO of Yue Yuen Industrial (Holdings) Limited (HKG:551) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Patty Tsai's Compensation Compare With Similar Sized Companies?
Our data indicates that Yue Yuen Industrial (Holdings) Limited is worth HK$34b, and total annual CEO compensation is US$347k. (This is based on the year to December 2018). That's less than last year. We think total compensation is more important but we note that the CEO salary is lower, at US$143k. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$536k.
A first glance this seems like a real positive for shareholders, since Patty Tsai is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Yue Yuen Industrial (Holdings), below.
Is Yue Yuen Industrial (Holdings) Limited Growing?
On average over the last three years, Yue Yuen Industrial (Holdings) Limited has shrunk earnings per share by 17% each year (measured with a line of best fit). It achieved revenue growth of 6.2% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Yue Yuen Industrial (Holdings) Limited Been A Good Investment?
Given the total loss of 11% over three years, many shareholders in Yue Yuen Industrial (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.
It appears that Yue Yuen Industrial (Holdings) Limited remunerates its CEO below most similar sized companies.
Patty Tsai is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. Shareholders may want to check for free if Yue Yuen Industrial (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 email@example.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.