Lung Lam has been the CEO of Yuzhou Properties Company Limited (HKG:1628) since 2012. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Lung Lam's Compensation Compare With Similar Sized Companies?
According to our data, Yuzhou Properties Company Limited has a market capitalization of HK$18b, and pays its CEO total annual compensation worth CN¥2.3m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at CN¥1.7m. We examined companies with market caps from CN¥6.9b to CN¥22b, and discovered that the median CEO total compensation of that group was CN¥3.4m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Yuzhou Properties has changed from year to year.
Is Yuzhou Properties Company Limited Growing?
Yuzhou Properties Company Limited has increased its earnings per share (EPS) by an average of 24% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 12%.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Yuzhou Properties Company Limited Been A Good Investment?
I think that the total shareholder return of 85%, over three years, would leave most Yuzhou Properties Company Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It looks like Yuzhou Properties Company Limited pays its CEO less than similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. The pleasing shareholder returns are the cherry on top; you might even consider that Lung Lam deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. The cherry on top would be if company insiders are buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Yuzhou Properties shares (free trial).
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.
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