Lei Shi is the CEO of Shanghai Fudan Microelectronics Group Company Limited (HKG:1385). First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Lei Shi's Compensation Compare With Similar Sized Companies?
Our data indicates that Shanghai Fudan Microelectronics Group Company Limited is worth HK$4.1b, and total annual CEO compensation was reported as CN¥3.5m for the year to December 2018. Notably, the salary of CN¥3.5m is the vast majority of the CEO compensation. We examined companies with market caps from CN¥1.4b to CN¥5.6b, and discovered that the median CEO total compensation of that group was CN¥2.3m.
It would therefore appear that Shanghai Fudan Microelectronics Group Company Limited pays Lei Shi 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.
You can see, below, how CEO compensation at Shanghai Fudan Microelectronics Group has changed over time.
Is Shanghai Fudan Microelectronics Group Company Limited Growing?
On average over the last three years, Shanghai Fudan Microelectronics Group Company Limited has shrunk earnings per share by 42% each year (measured with a line of best fit). Its revenue is down 7.0% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Shanghai Fudan Microelectronics Group Company Limited Been A Good Investment?
Shanghai Fudan Microelectronics Group Company Limited has generated a total shareholder return of 1.0% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared total CEO remuneration at Shanghai Fudan Microelectronics Group Company Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. While shareholder returns are acceptable, they don't delight. So you may want to delve deeper, because we don't think the CEO pay is too low. Shareholders may want to check for free if Shanghai Fudan Microelectronics Group insiders are buying or selling shares.
If you want to buy a stock that is better than Shanghai Fudan Microelectronics Group, this free list of high return, low debt companies is a great place to look.
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