Yuming Lin became the CEO of Harmonicare Medical Holdings Limited (HKG:1509) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Yuming Lin’s Compensation Compare With Similar Sized Companies?
According to our data, Harmonicare Medical Holdings Limited has a market capitalization of HK$1.5b, and pays its CEO total annual compensation worth CN¥519k. (This is based on the year to December 2017). Notably, the salary of CN¥512k is the vast majority of the CEO compensation. We examined companies with market caps from CN¥672m to CN¥2.7b, and discovered that the median CEO total compensation of that group was CN¥1.5m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Harmonicare Medical Holdings has changed from year to year.
Is Harmonicare Medical Holdings Limited Growing?
Harmonicare Medical Holdings Limited has reduced its earnings per share by an average of 55% a year, over the last three years (measured with a line of best fit). Its revenue is up 18% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Harmonicare Medical Holdings Limited Been A Good Investment?
Since shareholders would have lost about 63% over three years, some Harmonicare Medical Holdings Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
Harmonicare Medical Holdings Limited is currently paying its CEO below what is normal for companies of its size.
Shareholders should note that compensation for Yuming Lin is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. Shareholders may want to check for free if Harmonicare Medical Holdings insiders are buying or selling shares.
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