In 2011 Xiaobo Zhao was appointed CEO of Technovator International Limited (HKG:1206). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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 Xiaobo Zhao’s Compensation Compare With Similar Sized Companies?
Our data indicates that Technovator International Limited is worth HK$430m, and total annual CEO compensation was reported as CN¥1.4m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CN¥600k. We examined a group of similar sized companies, with market capitalizations of below CN¥1.4b. The median CEO total compensation in that group is CN¥1.6m.
So Xiaobo Zhao is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Technovator International has changed from year to year.
Is Technovator International Limited Growing?
Over the last three years Technovator International Limited has grown its earnings per share (EPS) by an average of 6.4% per year (using a line of best fit). It saw its revenue drop 9.8% over the last year.
I would argue that the lack of revenue growth in the last year is less than ideal, but I’m happy with the EPS growth. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching. 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 Technovator International Limited Been A Good Investment?
With a three year total loss of 82%, Technovator International Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
Xiaobo Zhao is paid around what is normal the leaders of comparable size companies.
The per share growth could be better, in our view. And it’s hard to argue that the returns over the last three years have delighted. So suffice it to say we don’t think the compensation is modest. So you may want to check if insiders are buying Technovator International shares with their own money (free access).
If you want to buy a stock that is better than Technovator International, this free list of high return, low debt companies is a great place to look.
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