What Does Q Technology (Group)'s (HKG:1478) CEO Pay Reveal?

This article will reflect on the compensation paid to Jianqiang Wang who has served as CEO of Q Technology (Group) Company Limited (HKG:1478) since 2016. This analysis will also assess whether Q Technology (Group) pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Q Technology (Group)

Comparing Q Technology (Group) Company Limited's CEO Compensation With the industry

According to our data, Q Technology (Group) Company Limited has a market capitalization of HK$13b, and paid its CEO total annual compensation worth CN¥1.6m over the year to December 2019. We note that's an increase of 91% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥739k.

For comparison, other companies in the same industry with market capitalizations ranging between HK$7.8b and HK$25b had a median total CEO compensation of CN¥3.1m. This suggests that Jianqiang Wang is paid below the industry median. What's more, Jianqiang Wang holds HK$122m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. Q Technology (Group) pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Q Technology (Group) Company Limited's Growth

Q Technology (Group) Company Limited's earnings per share (EPS) grew 28% per year over the last three years. It achieved revenue growth of 69% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Q Technology (Group) Company Limited Been A Good Investment?

Given the total shareholder loss of 11% over three years, many shareholders in Q Technology (Group) Company Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, Q Technology (Group) pays its CEO lower than the norm for similar-sized companies belonging to the same industry. However we must not forget that the EPS growth has been very strong over three years. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. Shareholders, though, would ideally like to see shareholder returns head north before they agree to any raise.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Q Technology (Group) that investors should be aware of in a dynamic business environment.

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.

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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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