In 2014 Yuming Lin was appointed CEO of Harmonicare Medical Holdings Limited (HKG:1509). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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 Yuming Lin’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Harmonicare Medical Holdings Limited has a market cap of HK$1.3b, and is paying total annual CEO compensation of CN¥519k. (This figure is for the year to 2017). It is worth noting that the CEO compensation consists almost entirely of the salary, worth CN¥512k. We looked at a group of companies with market capitalizations from CN¥688m to CN¥2.8b, and the median CEO compensation was CN¥1.9m.
A first glance this seems like a real positive for shareholders, since Yuming Lin is paid less than the average compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Harmonicare Medical Holdings has changed over time.
Is Harmonicare Medical Holdings Limited Growing?
Over the last three years Harmonicare Medical Holdings Limited has shrunk its earnings per share by an average of 55% per year. In the last year, its revenue is up 18%.
Sadly for shareholders, earnings per share are actually down, over three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Harmonicare Medical Holdings Limited Been A Good Investment?
With a three year total loss of 74%, Harmonicare Medical Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Harmonicare Medical Holdings Limited is currently paying its CEO below what is normal for companies of its size.
The compensation paid to Yuming Lin is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. So you may want to check if insiders are buying Harmonicare Medical Holdings shares with their own money (free access).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.