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Is Lonking Holdings Limited's (HKG:3339) CEO Being Overpaid?

Simply Wall St

In 2015 San Li was appointed CEO of Lonking Holdings Limited (HKG:3339). 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

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See our latest analysis for Lonking Holdings

How Does San Li's Compensation Compare With Similar Sized Companies?

According to our data, Lonking Holdings Limited has a market capitalization of HK$10b, and pays its CEO total annual compensation worth CN¥3.3m. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at CN¥2.0m. We examined companies with market caps from CN¥6.9b to CN¥22b, and discovered that the median CEO total compensation of that group was CN¥3.2m.

So San Li receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at Lonking Holdings has changed over time.

SEHK:3339 CEO Compensation, May 28th 2019

Is Lonking Holdings Limited Growing?

On average over the last three years, Lonking Holdings Limited has grown earnings per share (EPS) by 62% each year (using a line of best fit). It achieved revenue growth of 32% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Lonking Holdings Limited Been A Good Investment?

I think that the total shareholder return of 125%, over three years, would leave most Lonking Holdings Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Remuneration for San Li is close enough to the median pay for a CEO of a similar sized company .

The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! So you may want to check if insiders are buying Lonking Holdings shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.