How Much is Launch Tech's (HKG:2488) CEO Getting Paid?

Charles Liu is the CEO of Launch Tech Company Limited (HKG:2488), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Launch Tech.

View our latest analysis for Launch Tech

Comparing Launch Tech Company Limited's CEO Compensation With the industry

Our data indicates that Launch Tech Company Limited has a market capitalization of HK$1.3b, and total annual CEO compensation was reported as CN¥1.8m for the year to December 2019. We note that's a decrease of 12% compared to last year. Notably, the salary which is CN¥1.74m, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between HK$775m and HK$3.1b had a median total CEO compensation of CN¥1.6m. From this we gather that Charles Liu is paid around the median for CEOs in the industry.

Talking in terms of the industry, salary represented approximately 68% of total compensation out of all the companies we analyzed, while other remuneration made up 32% of the pie. Launch Tech has gone down a largely traditional route, paying Charles Liu a high salary, giving it preference over non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Launch Tech Company Limited's Growth

Launch Tech Company Limited has reduced its earnings per share by 102% a year over the last three years. It saw its revenue drop 13% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Launch Tech Company Limited Been A Good Investment?

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

To Conclude...

Launch Tech pays its CEO a majority of compensation through a salary. As previously discussed, Charles is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which makes us a bit uncomfortable) in Launch Tech we think you should know about.

Switching gears from Launch Tech, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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