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Is MicroPort Scientific Corporation's (HKG:853) CEO Pay Fair?

Simply Wall St

In 2012 Maxwell Chang was appointed CEO of MicroPort Scientific Corporation (HKG:853). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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 MicroPort Scientific

How Does Maxwell Chang's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that MicroPort Scientific Corporation has a market cap of HK$16b, and reported total annual CEO compensation of US$1.9m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$96k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$550k.

Thus we can conclude that Maxwell Chang receives more in total compensation than the median of a group of companies in the same market, and of similar size to MicroPort Scientific Corporation. 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 MicroPort Scientific has changed over time.

SEHK:853 CEO Compensation, January 22nd 2020
SEHK:853 CEO Compensation, January 22nd 2020

Is MicroPort Scientific Corporation Growing?

Over the last three years MicroPort Scientific Corporation has grown its earnings per share (EPS) by an average of 54% per year (using a line of best fit). In the last year, its revenue is up 40%.

This demonstrates that the company has been improving recently. A good result. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Shareholders might be interested in this free visualization of analyst forecasts.

Has MicroPort Scientific Corporation Been A Good Investment?

I think that the total shareholder return of 81%, over three years, would leave most MicroPort Scientific Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared the total CEO remuneration paid by MicroPort Scientific Corporation, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling MicroPort Scientific shares (free trial).

If you want to buy a stock that is better than MicroPort Scientific, this free list of high return, low debt companies is a great place to look.

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.