Jack Lu has been the CEO of PAX Global Technology Limited (HKG:327) since 2013. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jack Lu’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that PAX Global Technology Limited has a market cap of HK$4.1b, and is paying total annual CEO compensation of HK$6m. We note that’s an increase of 17% above 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$2m.
It would therefore appear that PAX Global Technology Limited pays Jack Lu 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 PAX Global Technology has changed over time.
Is PAX Global Technology Limited Growing?
Over the last three years PAX Global Technology Limited has shrunk its earnings per share by an average of 12% per year. In the last year, its revenue is up 21%.
Few shareholders would be pleased to read that earnings per share are lower over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
It could be important to check this free visual depiction of what analysts expect for the future.
Has PAX Global Technology Limited Been A Good Investment?
Since shareholders would have lost about 60% over three years, some PAX Global Technology Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount PAX Global Technology Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. This contrasts with the growth in CEO remuneration, year on year. This analysis suggests to us that the CEO is paid too generously! So you may want to check if insiders are buying PAX Global Technology Limited shares with their own money (free access).
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 firstname.lastname@example.org.