Jian Xue has been the CEO of Kai Yuan Holdings Limited (HKG:1215) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jian Xue's Compensation Compare With Similar Sized Companies?
Our data indicates that Kai Yuan Holdings Limited is worth HK$409m, and total annual CEO compensation was reported as HK$3.8m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at HK$2.6m. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.8m.
It would therefore appear that Kai Yuan Holdings Limited pays Jian Xue 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. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Kai Yuan Holdings has changed from year to year.
Is Kai Yuan Holdings Limited Growing?
Over the last three years Kai Yuan Holdings Limited has grown its earnings per share (EPS) by an average of 89% per year (using a line of best fit). It saw its revenue drop 4.6% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Kai Yuan Holdings Limited Been A Good Investment?
With a three year total loss of 61%, Kai Yuan Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount Kai Yuan Holdings Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. Whatever your view on compensation, you might want to check if insiders are buying or selling Kai Yuan Holdings shares (free trial).
If you want to buy a stock that is better than Kai Yuan Holdings, this free list of high return, low debt companies is a great place to look.
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