Zuric Chan became the CEO of Chinney Alliance Group Limited (HKG:385) in 2012. 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.
How Does Zuric Chan’s Compensation Compare With Similar Sized Companies?
Our data indicates that Chinney Alliance Group Limited is worth HK$779m, and total annual CEO compensation was reported as HK$3.3m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at HK$400k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. 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.
It would therefore appear that Chinney Alliance Group Limited pays Zuric Chan 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Chinney Alliance Group has changed over time.
Is Chinney Alliance Group Limited Growing?
On average over the last three years, Chinney Alliance Group Limited has shrunk earnings per share by 1.1% each year (measured with a line of best fit). In the last year, its revenue changed by just 0.2%.
In the last three years the company has failed to grow earnings per share. And the flat revenue hardly impresses. 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 shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Chinney Alliance Group Limited Been A Good Investment?
Boasting a total shareholder return of 39% over three years, Chinney Alliance Group Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at Chinney Alliance Group Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. On the other hand, returns have been good, so the company is doing something right. So on this analysis we’d stop short of criticizing the level of CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Chinney Alliance Group shares (free trial).
If you want to buy a stock that is better than Chinney Alliance Group, this free list of high return, low debt companies is a great place to look.
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