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Zhenyong Liu became the CEO of IT Tech Packaging, Inc. (NYSEMKT:ITP) in 2007. 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.
How Does Zhenyong Liu's Compensation Compare With Similar Sized Companies?
According to our data, IT Tech Packaging, Inc. has a market capitalization of US$18m, and pays its CEO total annual compensation worth US$124k. (This number is for the twelve months until December 2018). Notably, that's an increase of 239% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$36k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$452k.
A first glance this seems like a real positive for shareholders, since Zhenyong Liu is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at IT Tech Packaging has changed from year to year.
Is IT Tech Packaging, Inc. Growing?
IT Tech Packaging, Inc. has reduced its earnings per share by an average of 99% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 9.3%.
Unfortunately, earnings per share have trended lower over the last three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has IT Tech Packaging, Inc. Been A Good Investment?
Given the total loss of 24% over three years, many shareholders in IT Tech Packaging, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
It looks like IT Tech Packaging, Inc. pays its CEO less than similar sized companies.
The compensation paid to Zhenyong Liu is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). This contrasts with the increase in CEO remuneration on last year, though it was off a low base. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. So you may want to check if insiders are buying IT Tech Packaging shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 firstname.lastname@example.org. 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.