The CEO of Finet Group Limited (HKG:8317) is Yuk Lo. First, this article will compare CEO compensation with compensation at similar sized companies. 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. This process should give us an idea about how appropriately the CEO is paid.
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How Does Yuk Lo’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Finet Group Limited has a market cap of HK$307m, and is paying total annual CEO compensation of HK$2.1m. (This number is for the twelve months until March 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth HK$2.1m. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO total compensation was HK$1.5m.
As you can see, Yuk Lo is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Finet Group 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 Finet Group, below.
Is Finet Group Limited Growing?
Over the last three years Finet Group Limited has grown its earnings per share (EPS) by an average of 15% per year (using a line of best fit). In the last year, its revenue is up 64%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Finet Group Limited Been A Good Investment?
Since shareholders would have lost about 43% over three years, some Finet Group Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount Finet Group Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. Whatever your view on compensation, you might want to check if insiders are buying or selling Finet Group shares (free trial).
Important note: Finet Group 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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If you spot an error that warrants correction, please contact the editor at email@example.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.