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Should You Worry About Tong Ren Tang Technologies Co. Ltd.'s (HKG:1666) CEO Pay Cheque?

Simply Wall St

Yu Wang has been the CEO of Tong Ren Tang Technologies Co. Ltd. (HKG:1666) since 2008. 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. 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.

Check out our latest analysis for Tong Ren Tang Technologies

How Does Yu Wang's Compensation Compare With Similar Sized Companies?

According to our data, Tong Ren Tang Technologies Co. Ltd. has a market capitalization of HK$10b, and paid its CEO total annual compensation worth CN¥2.2m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CN¥1.3m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CN¥7.0b to CN¥23b. The median total CEO compensation was CN¥3.9m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

The graphic below shows how CEO compensation at Tong Ren Tang Technologies has changed from year to year.

SEHK:1666 CEO Compensation, November 2nd 2019

Is Tong Ren Tang Technologies Co. Ltd. Growing?

On average over the last three years, Tong Ren Tang Technologies Co. Ltd. has grown earnings per share (EPS) by 4.2% each year (using a line of best fit). It saw its revenue drop 6.3% over the last year.

I would argue that the lack of revenue growth in the last year is less than ideal, but I'm happy with the EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.

Has Tong Ren Tang Technologies Co. Ltd. Been A Good Investment?

Given the total loss of 43% over three years, many shareholders in Tong Ren Tang Technologies Co. Ltd. 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...

It looks like Tong Ren Tang Technologies Co. Ltd. pays its CEO less than similar sized companies.

Yu Wang receives relatively low remuneration compared to similar sized companies. But the company isn't exactly firing on all cylinders, and returns over three years are not good. Many shareholders would probably like to see improvements, but our analysis does not suggest that CEO compensation is too generous. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Tong Ren Tang Technologies.

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

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.