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Why Green Leader Holdings Group Limited's (HKG:61) CEO Pay Matters To You

Simply Wall St

In 2017 Michael Tse was appointed CEO of Green Leader Holdings Group Limited (HKG:61). 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Green Leader Holdings Group

How Does Michael Tse's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Green Leader Holdings Group Limited has a market cap of HK$263m, and reported total annual CEO compensation of HK$5.9m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at HK$1.6m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO total compensation in that group is HK$1.8m.

As you can see, Michael Tse is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Green Leader Holdings Group Limited is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Green Leader Holdings Group, below.

SEHK:61 CEO Compensation, January 29th 2020

Is Green Leader Holdings Group Limited Growing?

Over the last three years Green Leader Holdings Group Limited has shrunk its earnings per share by an average of 3.3% per year (measured with a line of best fit). Its revenue is up 35% over last year.

As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Green Leader Holdings Group Limited Been A Good Investment?

Given the total loss of 88% over three years, many shareholders in Green Leader Holdings Group Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Green Leader Holdings Group Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. Shareholders may want to check for free if Green Leader Holdings Group insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.