This article will reflect on the compensation paid to Peng Li who has served as CEO of FY Financial (Shenzhen) Co., Ltd. (HKG:8452) since 2015. This analysis will also assess whether FY Financial (Shenzhen) pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Peng Li Compare With Other Companies In The Industry?
At the time of writing, our data shows that FY Financial (Shenzhen) Co., Ltd. has a market capitalization of HK$252m, and reported total annual CEO compensation of CN¥668k for the year to December 2019. That's mostly flat as compared to the prior year's compensation. In particular, the salary of CN¥432.1k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.5m. In other words, FY Financial (Shenzhen) pays its CEO lower than the industry median.
Talking in terms of the industry, salary represented approximately 67% of total compensation out of all the companies we analyzed, while other remuneration made up 33% of the pie. Our data reveals that FY Financial (Shenzhen) allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
FY Financial (Shenzhen) Co., Ltd.'s Growth
Over the past three years, FY Financial (Shenzhen) Co., Ltd. has seen its earnings per share (EPS) grow by 46% per year. In the last year, its revenue is down 20%.
This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has FY Financial (Shenzhen) Co., Ltd. Been A Good Investment?
Given the total shareholder loss of 33% over three years, many shareholders in FY Financial (Shenzhen) Co., Ltd. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we touched on above, FY Financial (Shenzhen) Co., Ltd. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the EPS growth over three years is certainly impressive. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. But shareholders will likely want to hold off on any raise for Peng until investor returns are positive.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 5 warning signs for FY Financial (Shenzhen) that investors should think about before committing capital to this stock.
Switching gears from FY Financial (Shenzhen), if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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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