Jack Lu became the CEO of PAX Global Technology Limited (HKG:327) in 2013. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Jack Lu’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that PAX Global Technology Limited has a market cap of HK$3.9b, and reported total annual CEO compensation of HK$8.1m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at HK$2.9m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from HK$1.6b to HK$6.3b, and the median CEO total compensation was HK$2.3m.
As you can see, Jack Lu is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean PAX Global Technology Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at PAX Global Technology has changed from year to year.
Is PAX Global Technology Limited Growing?
PAX Global Technology Limited has reduced its earnings per share by an average of 5.9% a year, over the last three years (measured with a line of best fit). Its revenue is up 27% over last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. It’s hard to reach a conclusion about business performance right now. This may be one to watch. You might want to check this free visual report on analyst forecasts for future earnings.
Has PAX Global Technology Limited Been A Good Investment?
With a three year total loss of 34%, PAX Global Technology Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared the total CEO remuneration paid by PAX Global Technology 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.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Although we’d stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at PAX Global Technology.
Important note: PAX Global Technology may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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