Is eForce Holdings Limited (HKG:943) Overpaying Its CEO?
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Liyang Liu became the CEO of eForce Holdings Limited (HKG:943) in 2010. 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 - 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 eForce Holdings
How Does Liyang Liu's Compensation Compare With Similar Sized Companies?
Our data indicates that eForce Holdings Limited is worth HK$1.8b, and total annual CEO compensation is HK$3.0m. (This number is for the twelve months until December 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth HK$3.0m. We looked at a group of companies with market capitalizations from HK$782m to HK$3.1b, and the median CEO total compensation was HK$2.1m.
Thus we can conclude that Liyang Liu receives more in total compensation than the median of a group of companies in the same market, and of similar size to eForce Holdings Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at eForce Holdings, below.
Is eForce Holdings Limited Growing?
eForce Holdings Limited has increased its earnings per share (EPS) by an average of 113% a year, over the last three years (using a line of best fit). It achieved revenue growth of 50% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has eForce Holdings Limited Been A Good Investment?
I think that the total shareholder return of 56%, over three years, would leave most eForce Holdings Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
We compared total CEO remuneration at eForce Holdings Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling eForce Holdings (free visualization of insider trades).
Important note: eForce Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.
