William Chan became the CEO of Rykadan Capital Limited (HKG:2288) in 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.
How Does William Chan's Compensation Compare With Similar Sized Companies?
Our data indicates that Rykadan Capital Limited is worth HK$344m, and total annual CEO compensation is HK$20m. (This figure is for the year to March 2019). While we always look at total compensation first, we note that the salary component is less, at HK$12m. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO total compensation was HK$1.9m.
It would therefore appear that Rykadan Capital Limited pays William Chan 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Rykadan Capital, below.
Is Rykadan Capital Limited Growing?
Rykadan Capital Limited has increased its earnings per share (EPS) by an average of 90% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 116%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Rykadan Capital Limited Been A Good Investment?
Since shareholders would have lost about 24% over three years, some Rykadan Capital Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Rykadan Capital Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Rykadan Capital (free visualization of insider trades).
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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