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Is Wonderful Sky Financial Group Holdings Limited's (HKG:1260) CEO Pay Fair?

Simply Wall St

In 2014 Tian Ni Liu was appointed CEO of Wonderful Sky Financial Group Holdings Limited (HKG:1260). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Wonderful Sky Financial Group Holdings

How Does Tian Ni Liu's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Wonderful Sky Financial Group Holdings Limited has a market cap of HK$955m, and is paying total annual CEO compensation of HK$3.6m. (This is based on the year to March 2019). Notably, the salary of HK$3.6m is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.9m.

As you can see, Tian Ni Liu is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Wonderful Sky Financial Group Holdings Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Wonderful Sky Financial Group Holdings, below.

SEHK:1260 CEO Compensation, September 10th 2019

Is Wonderful Sky Financial Group Holdings Limited Growing?

Wonderful Sky Financial Group Holdings Limited has reduced its earnings per share by an average of 23% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 36% over the last year.

As investors, we are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Wonderful Sky Financial Group Holdings Limited Been A Good Investment?

Given the total loss of 58% over three years, many shareholders in Wonderful Sky Financial Group Holdings 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 examined the amount Wonderful Sky Financial Group Holdings Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. 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 Wonderful Sky Financial Group Holdings insiders are buying or selling shares.

If you want to buy a stock that is better than Wonderful Sky Financial Group Holdings, this free list of high return, low debt companies is a great place to look.

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.