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How Should Investors React To eForce Holdings Limited's (HKG:943) CEO Pay?

Simply Wall St

Liyang Liu has been the CEO of eForce Holdings Limited (HKG:943) since 2010. 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 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.

Check out our latest analysis for eForce Holdings

How Does Liyang Liu's Compensation Compare With Similar Sized Companies?

Our data indicates that eForce Holdings Limited is worth HK$1.6b, and total annual CEO compensation was reported as HK$3.0m for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth HK$3.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$777m to HK$3.1b. The median total CEO compensation was HK$2.3m.

As you can see, Liyang Liu is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean eForce Holdings Limited is paying too much. 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, below, how CEO compensation at eForce Holdings has changed over time.

SEHK:943 CEO Compensation, January 25th 2020

Is eForce Holdings Limited Growing?

eForce Holdings Limited has increased its earnings per share (EPS) by an average of 110% a year, over the last three years (using a line of best fit). It achieved revenue growth of 31% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. 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 eForce Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 81% over three years, eForce Holdings Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We examined the amount eForce Holdings 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.

However we must not forget that the EPS growth has been very strong over three years. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. Shareholders may want to check for free if eForce Holdings insiders are buying or selling shares.

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.

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.

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. Thank you for reading.