Is KuangChi Science Limited’s (HKG:439) CEO Being Overpaid?
Yang Yang Zhang became the CEO of KuangChi Science Limited (HKG:439) in 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for KuangChi Science
How Does Yang Yang Zhang’s Compensation Compare With Similar Sized Companies?
According to our data, KuangChi Science Limited has a market capitalization of HK$4.1b, and pays its CEO total annual compensation worth HK$4.8m. That’s less than last year. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$1.6b to HK$6.3b. The median total CEO compensation was HK$2.3m.
Thus we can conclude that Yang Yang Zhang receives more in total compensation than the median of a group of companies in the same market, and of similar size to KuangChi Science Limited. However, this doesn’t necessarily mean the pay 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, below, how CEO compensation at KuangChi Science has changed over time.
Is KuangChi Science Limited Growing?
On average over the last three years, KuangChi Science Limited has shrunk earnings per share by 6.1% each year. Its revenue is up 22% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has KuangChi Science Limited Been A Good Investment?
Since shareholders would have lost about 80% over three years, some KuangChi Science Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary…
We compared total CEO remuneration at KuangChi Science Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Arguably worse, investors are without a positive return for the last three years. Some might well form the view that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling KuangChi Science Limited (free visualization of insider trades).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
