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Is Greentech Technology International Limited's (HKG:195) CEO Being Overpaid?

Simply Wall St

Dong Nie became the CEO of Greentech Technology International Limited (HKG:195) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.

See our latest analysis for Greentech Technology International

How Does Dong Nie's Compensation Compare With Similar Sized Companies?

Our data indicates that Greentech Technology International Limited is worth HK$403m, and total annual CEO compensation is HK$8.8m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at HK$1.5m. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.8m.

Thus we can conclude that Dong Nie receives more in total compensation than the median of a group of companies in the same market, and of similar size to Greentech Technology International Limited. However, this doesn't necessarily mean the pay 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.

The graphic below shows how CEO compensation at Greentech Technology International has changed from year to year.

SEHK:195 CEO Compensation, July 29th 2019

Is Greentech Technology International Limited Growing?

On average over the last three years, Greentech Technology International Limited has grown earnings per share (EPS) by 69% each year (using a line of best fit). In the last year, its revenue changed by just 0.7%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Greentech Technology International Limited Been A Good Investment?

Given the total loss of 45% over three years, many shareholders in Greentech Technology International Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared total CEO remuneration at Greentech Technology International Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Greentech Technology International shares (free trial).

Important note: Greentech Technology International 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.