Is Walcom Group Limited’s (LON:WALG) CEO Pay Justified?

Francis Chi is the CEO of Walcom Group Limited (LON:WALG). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Walcom Group

How Does Francis Chi’s Compensation Compare With Similar Sized Companies?

Our data indicates that Walcom Group Limited is worth UK£258k, and total annual CEO compensation is HK$2.2m. (This is based on the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at HK$1.3m. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO compensation to be HK$2.4m.

So Francis Chi receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at Walcom Group has changed over time.

AIM:WALG CEO Compensation, March 8th 2019
AIM:WALG CEO Compensation, March 8th 2019

Is Walcom Group Limited Growing?

Walcom Group Limited has reduced its earnings per share by an average of 131% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down -2.7%.

Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don’t have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Walcom Group Limited Been A Good Investment?

Since shareholders would have lost about 57% over three years, some Walcom Group Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

Francis Chi is paid around the same as most CEOs of similar size companies.

Returns have been disappointing and the company is not growing its earnings per share. Suffice it to say, we don’t think the CEO is underpaid! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Walcom Group (free visualization of insider trades).

If you want to buy a stock that is better than Walcom Group, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.