Does EVA Precision Industrial Holdings Limited’s (HKG:838) CEO Pay Compare Well With Peers?

The CEO of EVA Precision Industrial Holdings Limited (HKG:838) is Yao Zhang. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for EVA Precision Industrial Holdings

How Does Yao Zhang’s Compensation Compare With Similar Sized Companies?

Our data indicates that EVA Precision Industrial Holdings Limited is worth HK$1.4b, and total annual CEO compensation is HK$14m. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at HK$4.6m. We examined companies with market caps from HK$785m to HK$3.1b, and discovered that the median CEO total compensation of that group was HK$1.8m.

As you can see, Yao Zhang is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean EVA Precision Industrial Holdings Limited is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at EVA Precision Industrial Holdings, below.

SEHK:838 CEO Compensation, March 17th 2019
SEHK:838 CEO Compensation, March 17th 2019

Is EVA Precision Industrial Holdings Limited Growing?

Over the last three years EVA Precision Industrial Holdings Limited has shrunk its earnings per share by an average of 33% per year (measured with a line of best fit). Its revenue is up 7.0% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. 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 might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has EVA Precision Industrial Holdings Limited Been A Good Investment?

With a three year total loss of 31%, EVA Precision Industrial Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We compared total CEO remuneration at EVA Precision Industrial Holdings Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.

Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at EVA Precision Industrial Holdings.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.