Richard Lam became the CEO of EverChina Int'l Holdings Company Limited (HKG:202) in 2009. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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.
How Does Richard Lam's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that EverChina Int'l Holdings Company Limited has a market cap of HK$1.6b, and reported total annual CEO compensation of HK$5.4m for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at HK$4.7m. We examined companies with market caps from HK$780m to HK$3.1b, and discovered that the median CEO total compensation of that group was HK$2.3m.
Thus we can conclude that Richard Lam receives more in total compensation than the median of a group of companies in the same market, and of similar size to EverChina Int'l Holdings Company 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.
You can see a visual representation of the CEO compensation at EverChina Int'l Holdings, below.
Is EverChina Int'l Holdings Company Limited Growing?
Over the last three years EverChina Int'l Holdings Company Limited has shrunk its earnings per share by an average of 21% per year (measured with a line of best fit). It achieved revenue growth of 501% over the last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 EverChina Int'l Holdings Company Limited Been A Good Investment?
Given the total loss of 38% over three years, many shareholders in EverChina Int'l Holdings Company Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount EverChina Int'l Holdings Company Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at EverChina Int'l Holdings.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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