Here's What We Learned About The CEO Pay At China Maple Leaf Educational Systems Limited (HKG:1317)

Sherman Jen became the CEO of China Maple Leaf Educational Systems Limited (HKG:1317) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for China Maple Leaf Educational Systems

How Does Total Compensation For Sherman Jen Compare With Other Companies In The Industry?

At the time of writing, our data shows that China Maple Leaf Educational Systems Limited has a market capitalization of HK$6.0b, and reported total annual CEO compensation of CN¥4.1m for the year to August 2020. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is CN¥3.61m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from HK$3.1b to HK$12b, the reported median CEO total compensation was CN¥1.2m. This suggests that Sherman Jen is paid more than the median for the industry. Moreover, Sherman Jen also holds HK$3.0b worth of China Maple Leaf Educational Systems stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 92% of total compensation represents salary and 8.4% is other remuneration. There isn't a significant difference between China Maple Leaf Educational Systems and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at China Maple Leaf Educational Systems Limited's Growth Numbers

China Maple Leaf Educational Systems Limited has seen its earnings per share (EPS) increase by 3.6% a year over the past three years. In the last year, its revenue is down 2.7%.

We would prefer it if there was revenue growth, but the modest EPSgrowth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has China Maple Leaf Educational Systems Limited Been A Good Investment?

Given the total shareholder loss of 58% over three years, many shareholders in China Maple Leaf Educational Systems Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, China Maple Leaf Educational Systems pays its CEO higher than the norm for similar-sized companies belonging to the same industry. The growth in the business has been uninspiring, but the shareholder returns for China Maple Leaf Educational Systems have arguably been worse, over the last three years. This doesn't look great when you consider Sherman is taking home compensation north of the industry average. Taking all this into account, it could be hard to get shareholder support for giving Sherman a 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 shouldn't be ignored) in China Maple Leaf Educational Systems we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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