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Is Golden Power Group Holdings Limited's (HKG:3919) CEO Being Overpaid?

Simply Wall St

Shuk Ching Chu has been the CEO of Golden Power Group Holdings Limited (HKG:3919) since 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Golden Power Group Holdings

How Does Shuk Ching Chu's Compensation Compare With Similar Sized Companies?

According to our data, Golden Power Group Holdings Limited has a market capitalization of HK$122m, and pays its CEO total annual compensation worth HK$2.1m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at HK$1.8m. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.9m.

That means Shuk Ching Chu receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Golden Power Group Holdings, below.

SEHK:3919 CEO Compensation, September 3rd 2019

Is Golden Power Group Holdings Limited Growing?

On average over the last three years, Golden Power Group Holdings Limited has shrunk earnings per share by 43% each year (measured with a line of best fit). It achieved revenue growth of 4.3% 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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Golden Power Group Holdings Limited Been A Good Investment?

Since shareholders would have lost about 37% over three years, some Golden Power Group Holdings Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shuk Ching Chu is paid around the same as most CEOs of similar size companies.

Returns have been disappointing and the company is not growing its earnings per share. Few would argue that it's wise for the company to pay any more, before returns improve. Shareholders may want to check for free if Golden Power Group Holdings insiders are buying or selling shares.

Important note: Golden Power Group 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.