Is Pacific Online Limited's (HKG:543) CEO Paid At A Competitive Rate?
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The CEO of Pacific Online Limited (HKG:543) is Wai Yan Lam. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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.
Check out our latest analysis for Pacific Online
How Does Wai Yan Lam's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Pacific Online Limited has a market cap of HK$1.6b, and is paying total annual CEO compensation of CN¥3.8m. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at CN¥608k. We examined companies with market caps from CN¥690m to CN¥2.8b, and discovered that the median CEO total compensation of that group was CN¥1.8m.
Thus we can conclude that Wai Yan Lam receives more in total compensation than the median of a group of companies in the same market, and of similar size to Pacific Online 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.
The graphic below shows how CEO compensation at Pacific Online has changed from year to year.
Is Pacific Online Limited Growing?
Over the last three years Pacific Online Limited has shrunk its earnings per share by an average of 19% per year (measured with a line of best fit). It achieved revenue growth of 6.1% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. 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, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Pacific Online Limited Been A Good Investment?
Since shareholders would have lost about 3.2% over three years, some Pacific Online Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We compared the total CEO remuneration paid by Pacific Online Limited, 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.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Pacific Online shares (free trial).
If you want to buy a stock that is better than Pacific Online, this free list of high return, low debt companies is a great place to look.
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.
