It Looks Like The CEO Of Luoyang Glass Company Limited (HKG:1108) May Be Underpaid Compared To Peers

The impressive results at Luoyang Glass Company Limited (HKG:1108) recently will be great news for shareholders. At the upcoming AGM on 28 June 2021, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

Check out our latest analysis for Luoyang Glass

Comparing Luoyang Glass Company Limited's CEO Compensation With the industry

At the time of writing, our data shows that Luoyang Glass Company Limited has a market capitalization of HK$7.6b, and reported total annual CEO compensation of CN¥859k for the year to December 2020. Notably, that's an increase of 28% over the year before. In particular, the salary of CN¥800.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the same industry with market caps ranging from HK$3.1b to HK$12b, we found that the median CEO total compensation was CN¥1.8m. That is to say, Yan Ma is paid under the industry median.

Component	2020	2019	Proportion (2020)
Salary	CN¥800k	CN¥600k	93%
Other	CN¥59k	CN¥72k	7%
Total Compensation	CN¥859k	CN¥672k	100%

Speaking on an industry level, nearly 93% of total compensation represents salary, while the remainder of 7% is other remuneration. Although there is a difference in how total compensation is set, Luoyang Glass more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Luoyang Glass Company Limited's Growth

Over the past three years, Luoyang Glass Company Limited has seen its earnings per share (EPS) grow by 78% per year. Its revenue is up 89% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Luoyang Glass Company Limited Been A Good Investment?

We think that the total shareholder return of 115%, over three years, would leave most Luoyang Glass Company Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Luoyang Glass that investors should be aware of in a dynamic business environment.

Switching gears from Luoyang Glass, 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.

If you're looking for stocks to buy, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.