Wing Chan has been the CEO of Yangtzekiang Garment Limited (HKG:294) since 1987. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Wing Chan’s Compensation Compare With Similar Sized Companies?
According to our data, Yangtzekiang Garment Limited has a market capitalization of HK$699m, and pays its CEO total annual compensation worth HK$2.0m. (This is based on the year to March 2018). Notably, the salary of HK$1.9m is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO compensation in that group is HK$1.5m.
Thus we can conclude that Wing Chan receives more in total compensation than the median of a group of companies in the same market, and of similar size to Yangtzekiang Garment Limited. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Yangtzekiang Garment has changed over time.
Is Yangtzekiang Garment Limited Growing?
Yangtzekiang Garment Limited has increased its earnings per share (EPS) by an average of 67% a year, over the last three years (using a line of best fit). Its revenue is down -1.5% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Yangtzekiang Garment Limited Been A Good Investment?
Yangtzekiang Garment Limited has generated a total shareholder return of 29% over three years, so most shareholders would be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared the total CEO remuneration paid by Yangtzekiang Garment Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. We also note that, over the same time frame, shareholder returns haven’t been bad. While it may be worth researching further, we don’t see a problem with the CEO pay, given the good EPS growth. So you may want to check if insiders are buying Yangtzekiang Garment shares with their own money (free access).
Important note: Yangtzekiang Garment may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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