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Is PFC Device Inc. (HKG:8231) Excessively Paying Its CEO?

Simply Wall St

The CEO of PFC Device Inc. (HKG:8231) is James Hong. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for PFC Device

How Does James Hong's Compensation Compare With Similar Sized Companies?

According to our data, PFC Device Inc. has a market capitalization of HK$68m, and paid its CEO total annual compensation worth US$187k over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$157k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$228k.

So James Hong is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at PFC Device, below.

SEHK:8231 CEO Compensation, January 16th 2020

Is PFC Device Inc. Growing?

On average over the last three years, PFC Device Inc. has shrunk earnings per share by 66% each year (measured with a line of best fit). It saw its revenue drop 35% over the 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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has PFC Device Inc. Been A Good Investment?

Given the total loss of 75% over three years, many shareholders in PFC Device Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

James Hong is paid around the same as most CEOs of similar size companies.

The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at PFC Device.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.