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Is Sinosoft Technology Group Limited's (HKG:1297) CEO Being Overpaid?

Simply Wall St

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The CEO of Sinosoft Technology Group Limited (HKG:1297) is Yingmei Xin. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Sinosoft Technology Group

How Does Yingmei Xin's Compensation Compare With Similar Sized Companies?

Our data indicates that Sinosoft Technology Group Limited is worth HK$3.2b, and total annual CEO compensation is CN¥2.3m. (This number is for the twelve months until December 2017). Notably, the salary of CN¥2.2m is the vast majority of the CEO compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CN¥1.3b to CN¥5.4b. The median total CEO compensation was CN¥1.6m.

Thus we can conclude that Yingmei Xin receives more in total compensation than the median of a group of companies in the same market, and of similar size to Sinosoft Technology Group Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Sinosoft Technology Group has changed from year to year.

SEHK:1297 CEO Compensation, March 28th 2019

Is Sinosoft Technology Group Limited Growing?

Over the last three years Sinosoft Technology Group Limited has grown its earnings per share (EPS) by an average of 15% per year (using a line of best fit). In the last year, its revenue is up 20%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.

Has Sinosoft Technology Group Limited Been A Good Investment?

Given the total loss of 15% over three years, many shareholders in Sinosoft Technology Group Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared total CEO remuneration at Sinosoft Technology Group Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within 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. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Sinosoft Technology Group (free visualization of insider trades).

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.

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.

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. Thank you for reading.