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Should You Worry About China Leon Inspection Holding Limited's (HKG:1586) CEO Pay Cheque?

Simply Wall St

Xiangli Li is the CEO of China Leon Inspection Holding Limited (HKG:1586). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for China Leon Inspection Holding

How Does Xiangli Li's Compensation Compare With Similar Sized Companies?

Our data indicates that China Leon Inspection Holding Limited is worth HK$520m, and total annual CEO compensation was reported as CN¥2.0m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CN¥1.1m. We took a group of companies with market capitalizations below CN¥1.4b, and calculated the median CEO total compensation to be CN¥1.6m.

So Xiangli Li receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at China Leon Inspection Holding has changed over time.

SEHK:1586 CEO Compensation, September 27th 2019

Is China Leon Inspection Holding Limited Growing?

China Leon Inspection Holding Limited has reduced its earnings per share by an average of 26% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 54% over the 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. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has China Leon Inspection Holding Limited Been A Good Investment?

With a three year total loss of 1.4%, China Leon Inspection Holding Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Xiangli Li is paid around what is normal the leaders of comparable size companies.

The per share growth could be better, in our view. And shareholder returns have been disappointing over the last three years. So many would argue that the CEO is certainly not underpaid. So you may want to check if insiders are buying China Leon Inspection Holding shares with their own money (free access).

Important note: China Leon Inspection Holding 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.

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.