In 2013 Jack Lu was appointed CEO of PAX Global Technology Limited (HKG:327). 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
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$4.0b, and reported total annual CEO compensation of HK$8.1m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at HK$2.9m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from HK$1.6b to HK$6.2b, and the median CEO total compensation was HK$2.6m.
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.
The graphic below shows how CEO compensation at PAX Global Technology has changed from year to year.
Is PAX Global Technology Limited Growing?
On average over the last three years, PAX Global Technology Limited has shrunk earnings per share by 5.9% each year (measured with a line of best fit). In the last year, its revenue is up 27%.
Investors should note that, over three years, earnings per share are down. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 22% over three years, some PAX Global Technology Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by PAX Global Technology 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.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. Whatever your view on compensation, you might want to check if insiders are buying or selling PAX Global Technology shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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