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Is Yangtzekiang Garment Limited (HKG:294) Overpaying Its CEO?

Simply Wall St

In 1987 Wing Kee Chan was appointed CEO of Yangtzekiang Garment Limited (HKG:294). First, this article will compare CEO compensation with compensation at similar sized companies. 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. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Yangtzekiang Garment

How Does Wing Kee Chan's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Yangtzekiang Garment Limited has a market cap of HK$600m, and reported total annual CEO compensation of HK$2.5m for the year to March 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$1.9m. 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$1.7m.

As you can see, Wing Kee Chan is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Yangtzekiang Garment 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, below, how CEO compensation at Yangtzekiang Garment has changed over time.

SEHK:294 CEO Compensation, December 4th 2019

Is Yangtzekiang Garment Limited Growing?

Yangtzekiang Garment Limited has reduced its earnings per share by an average of 20% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 8.2%.

Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Yangtzekiang Garment Limited Been A Good Investment?

With a total shareholder return of 12% over three years, Yangtzekiang Garment Limited shareholders would, in general, be reasonably content. 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.

In Summary...

We compared the total CEO remuneration paid by Yangtzekiang Garment Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us. And while shareholder returns have been respectable, they have hardly been superb. So we doubt many shareholders would consider the CEO pay to be particularly modest! So you may want to check if insiders are buying Yangtzekiang Garment shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.