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Is Essex Bio-Technology Limited's (HKG:1061) CEO Being Overpaid?

Simply Wall St

Haizhou Fang is the CEO of Essex Bio-Technology Limited (HKG:1061). 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Essex Bio-Technology

How Does Haizhou Fang's Compensation Compare With Similar Sized Companies?

According to our data, Essex Bio-Technology Limited has a market capitalization of HK$3.6b, and paid its CEO total annual compensation worth HK$1.8m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at HK$766k. We examined companies with market caps from HK$1.6b to HK$6.2b, and discovered that the median CEO total compensation of that group was HK$2.6m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see, below, how CEO compensation at Essex Bio-Technology has changed over time.

SEHK:1061 CEO Compensation, December 30th 2019

Is Essex Bio-Technology Limited Growing?

Over the last three years Essex Bio-Technology Limited has grown its earnings per share (EPS) by an average of 26% per year (using a line of best fit). It achieved revenue growth of 17% over the last year.

This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Essex Bio-Technology Limited Been A Good Investment?

Most shareholders would probably be pleased with Essex Bio-Technology Limited for providing a total return of 92% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

It looks like Essex Bio-Technology Limited pays its CEO less than similar sized companies.

Many would consider this to indicate that the pay is modest since the business is growing. And given most shareholders are probably very happy with recent returns, you might even think that Haizhou Fang deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. Shareholders may want to check for free if Essex Bio-Technology insiders are buying or selling shares.

Important note: Essex Bio-Technology 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.

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.

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. Thank you for reading.