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Is High Fashion International Limited's (HKG:608) CEO Paid At A Competitive Rate?

Simply Wall St

Foo Lam is the CEO of High Fashion International Limited (HKG:608). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for High Fashion International

How Does Foo Lam's Compensation Compare With Similar Sized Companies?

Our data indicates that High Fashion International Limited is worth HK$532m, and total annual CEO compensation is HK$8.3m. (This is based on the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at HK$5.1m. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.5m.

Thus we can conclude that Foo Lam receives more in total compensation than the median of a group of companies in the same market, and of similar size to High Fashion International 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.

The graphic below shows how CEO compensation at High Fashion International has changed from year to year.

SEHK:608 CEO Compensation, April 23rd 2019

Is High Fashion International Limited Growing?

Over the last three years High Fashion International Limited has grown its earnings per share (EPS) by an average of 3.1% per year (using a line of best fit). It achieved revenue growth of 13% over the last year.

This revenue growth could really point to a brighter future. And, while modest, the earnings per share growth is noticeable. So while performance isn't amazing, we think it really does seem quite respectable. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has High Fashion International Limited Been A Good Investment?

Given the total loss of 15% over three years, many shareholders in High Fashion 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 examined the amount High Fashion International Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at High Fashion International.

If you want to buy a stock that is better than High Fashion International, this free list of high return, low debt companies is a great place to look.

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.