Thomas Lau is the CEO of Lifestyle China Group Limited (HKG:2136). 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 Thomas Lau's Compensation Compare With Similar Sized Companies?
Our data indicates that Lifestyle China Group Limited is worth HK$3.2b, and total annual CEO compensation was reported as CN¥15m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥6.1m. When we examined a selection of companies with market caps ranging from CN¥1.4b to CN¥5.7b, we found the median CEO total compensation was CN¥2.2m.
It would therefore appear that Lifestyle China Group Limited pays Thomas Lau 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 get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Lifestyle China Group, below.
Is Lifestyle China Group Limited Growing?
Lifestyle China Group Limited has increased its earnings per share (EPS) by an average of 12% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 3.8%.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Lifestyle China Group Limited Been A Good Investment?
With a three year total loss of 8.3%, Lifestyle China Group Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount Lifestyle China Group 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.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Lifestyle China Group shares (free trial).
Important note: Lifestyle China Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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