In 1992 Steve Lau was appointed CEO of China Fortune Holdings Limited (HKG:110). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for China Fortune Holdings
How Does Steve Lau's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that China Fortune Holdings Limited has a market cap of HK$73m, and reported total annual CEO compensation of HK$2.8m for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth HK$2.8m. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.8m.
Thus we can conclude that Steve Lau receives more in total compensation than the median of a group of companies in the same market, and of similar size to China Fortune Holdings Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at China Fortune Holdings, below.
Is China Fortune Holdings Limited Growing?
Over the last three years China Fortune Holdings Limited has grown its earnings per share (EPS) by an average of 22% per year (using a line of best fit). In the last year, its revenue is up 412%.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. 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 China Fortune Holdings Limited Been A Good Investment?
With a three year total loss of 79%, China Fortune Holdings Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared the total CEO remuneration paid by China Fortune Holdings Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at China Fortune Holdings.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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