The CEO of Raymond Industrial Limited (HKG:229) is Raymond Wong. First, this article will compare CEO compensation with compensation at similar sized companies. 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.
How Does Raymond Wong's Compensation Compare With Similar Sized Companies?
Our data indicates that Raymond Industrial Limited is worth HK$465m, and total annual CEO compensation was reported as HK$4.7m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at HK$3.7m. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.7m.
It would therefore appear that Raymond Industrial Limited pays Raymond Wong more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Raymond Industrial has changed from year to year.
Is Raymond Industrial Limited Growing?
Over the last three years Raymond Industrial Limited has shrunk its earnings per share by an average of 2.3% per year (measured with a line of best fit). In the last year, its revenue is up 9.4%.
Unfortunately there is a complete lack of earnings per share improvement, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Raymond Industrial Limited Been A Good Investment?
With a total shareholder return of 9.6% over three years, Raymond Industrial Limited has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared total CEO remuneration at Raymond Industrial Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. While shareholder returns are acceptable, they don't delight. So we doubt many shareholders would consider the CEO pay to be particularly modest! Whatever your view on compensation, you might want to check if insiders are buying or selling Raymond Industrial shares (free trial).
If you want to buy a stock that is better than Raymond Industrial, this free list of high return, low debt companies is a great place to look.
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