In 1994 Peter Lau was appointed CEO of Giordano International Limited (HKG:709). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Peter Lau's Compensation Compare With Similar Sized Companies?
According to our data, Giordano International Limited has a market capitalization of HK$4.2b, and pays its CEO total annual compensation worth HK$21m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$3.6m. We examined companies with market caps from HK$1.6b to HK$6.3b, and discovered that the median CEO total compensation of that group was HK$2.5m.
As you can see, Peter Lau is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Giordano International Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Giordano International has changed over time.
Is Giordano International Limited Growing?
Earnings per share at Giordano International Limited are much the same as they were three years ago, albeit with a positive trend. Its revenue is down -8.2% over last year.
I would prefer it if there was revenue growth, but it is good to see modest EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has Giordano International Limited Been A Good Investment?
Since shareholders would have lost about 24% over three years, some Giordano International Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Giordano International Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Giordano International (free visualization of insider trades).
Important note: Giordano 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.
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