In 2011 Deqiang Zhang was appointed CEO of Wuxi Sunlit Science and Technology Company Limited (HKG:1289). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Deqiang Zhang's Compensation Compare With Similar Sized Companies?
Our data indicates that Wuxi Sunlit Science and Technology Company Limited is worth HK$156m, and total annual CEO compensation was reported as CN¥583k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CN¥450k. We looked at a group of companies with market capitalizations under CN¥1.4b, and the median CEO total compensation was CN¥1.5m.
Most shareholders would consider it a positive that Deqiang Zhang takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Wuxi Sunlit Science and Technology has changed over time.
Is Wuxi Sunlit Science and Technology Company Limited Growing?
On average over the last three years, Wuxi Sunlit Science and Technology Company Limited has grown earnings per share (EPS) by 35% each year (using a line of best fit). It saw its revenue drop 48% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Wuxi Sunlit Science and Technology Company Limited Been A Good Investment?
Since shareholders would have lost about 51% over three years, some Wuxi Sunlit Science and Technology Company Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Wuxi Sunlit Science and Technology Company Limited is currently paying its CEO below what is normal for companies of its size.
Since the business is growing, many would argue this suggests the pay is modest. Unfortunately, some shareholders may be disappointed with their returns, given the company's performance over the last three years. So while we would not say that Deqiang Zhang is generously paid, it would be good to see an improvement in business performance before too an increase in pay. In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Wuxi Sunlit Science and Technology.
If you want to buy a stock that is better than Wuxi Sunlit Science and Technology, this free list of high return, low debt companies is a great place to look.
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