Yiliang Lou became the CEO of InnoTek Limited (SGX:M14) in 2017. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Yiliang Lou's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that InnoTek Limited has a market cap of S$103m, and reported total annual CEO compensation of S$622k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at S$479k. We took a group of companies with market capitalizations below S$269m, and calculated the median CEO total compensation to be S$464k.
It would therefore appear that InnoTek Limited pays Yiliang Lou more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration 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 InnoTek, below.
Is InnoTek Limited Growing?
InnoTek Limited has increased its earnings per share (EPS) by an average of 36% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 12%.
This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. 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 InnoTek Limited Been A Good Investment?
Boasting a total shareholder return of 65% over three years, InnoTek Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We compared the total CEO remuneration paid by InnoTek Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling InnoTek (free visualization of insider trades).
Important note: InnoTek 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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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