Why Colour Life Services Group Co., Limited’s (HKG:1778) CEO Pay Matters To You
The CEO of Colour Life Services Group Co., Limited (HKG:1778) is Xuebin Tang. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Colour Life Services Group
How Does Xuebin Tang’s Compensation Compare With Similar Sized Companies?
According to our data, Colour Life Services Group Co., Limited has a market capitalization of HK$6.2b, and pays its CEO total annual compensation worth CN¥961k. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CN¥362k. When we examined a selection of companies with market caps ranging from CN¥2.7b to CN¥11b, we found the median CEO compensation was CN¥2.8m.
A first glance this seems like a real positive for shareholders, since Xuebin Tang is paid less than the average compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Colour Life Services Group has changed from year to year.
Is Colour Life Services Group Co., Limited Growing?
On average over the last three years, Colour Life Services Group Co., Limited has grown earnings per share (EPS) by 30% each year (using a line of best fit). In the last year, its revenue is up 74%.
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. Shareholders might be interested in this free visualization of analyst forecasts.
Has Colour Life Services Group Co., Limited Been A Good Investment?
With a three year total loss of 13%, Colour Life Services Group Co., Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
It appears that Colour Life Services Group Co., Limited remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we would not say that Xuebin Tang is generously paid, it would be good to see an improvement in business performance before too an increase in pay.
When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. So you may want to check if insiders are buying Colour Life Services Group shares with their own money (free access).
Important note: Colour Life Services 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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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.
