How Should Investors React To Wisdom Education International Holdings' (HKG:6068) CEO Pay?

Suwen Li is the CEO of Wisdom Education International Holdings Company Limited (HKG:6068), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Wisdom Education International Holdings.

View our latest analysis for Wisdom Education International Holdings

Comparing Wisdom Education International Holdings Company Limited's CEO Compensation With the industry

Our data indicates that Wisdom Education International Holdings Company Limited has a market capitalization of HK$8.3b, and total annual CEO compensation was reported as CN¥2.2m for the year to August 2020. That's a notable increase of 14% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥53k.

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¥1.1m. This suggests that Suwen Li is paid more than the median for the industry. Moreover, Suwen Li also holds HK$2.2b worth of Wisdom Education International Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 90% of total compensation out of all the companies we analyzed, while other remuneration made up 9.7% of the pie. Investors may find it interesting that Wisdom Education International Holdings paid a marginal salary to Suwen Li, over the past year, focusing on non-salary compensation instead. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Wisdom Education International Holdings Company Limited's Growth Numbers

Wisdom Education International Holdings Company Limited's earnings per share (EPS) grew 32% per year over the last three years. It achieved revenue growth of 6.6% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Wisdom Education International Holdings Company Limited Been A Good Investment?

Given the total shareholder loss of 30% over three years, many shareholders in Wisdom Education International Holdings Company Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Wisdom Education International Holdings primarily uses non-salary benefits to reward its CEO. As we touched on above, Wisdom Education International Holdings Company Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the EPS growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 5 warning signs for Wisdom Education International Holdings that investors should look into moving forward.

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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