Stock Analysis

What Did MicroPort Scientific's (HKG:853) CEO Take Home Last Year?

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This article will reflect on the compensation paid to Maxwell Chang who has served as CEO of MicroPort Scientific Corporation (HKG:853) since 2012. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for MicroPort Scientific

Comparing MicroPort Scientific Corporation's CEO Compensation With the industry

According to our data, MicroPort Scientific Corporation has a market capitalization of HK$58b, and paid its CEO total annual compensation worth US$3.6m over the year to December 2019. That's a notable increase of 91% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$96k.

On comparing similar companies from the same industry with market caps ranging from HK$31b to HK$93b, we found that the median CEO total compensation was US$4.2m. From this we gather that Maxwell Chang is paid around the median for CEOs in the industry.

Component20192018Proportion (2019)
Salary US$96k US$96k 3%
Other US$3.5m US$1.8m 97%
Total CompensationUS$3.6m US$1.9m100%

Talking in terms of the industry, salary represented approximately 52% of total compensation out of all the companies we analyzed, while other remuneration made up 48% of the pie. Investors may find it interesting that MicroPort Scientific paid a marginal salary to Maxwell Chang, over the past year, focusing on non-salary compensation instead. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

SEHK:853 CEO Compensation November 18th 2020

A Look at MicroPort Scientific Corporation's Growth Numbers

Over the last three years, MicroPort Scientific Corporation has shrunk its earnings per share by 35% per year. In the last year, its revenue is down 5.9%.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 MicroPort Scientific Corporation Been A Good Investment?

Boasting a total shareholder return of 273% over three years, MicroPort Scientific Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

MicroPort Scientific primarily uses non-salary benefits to reward its CEO. As we touched on above, MicroPort Scientific Corporation is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This isn't great when you look at it against the backdrop of EPS growth, which has been negative for the past three years. On the flip side, shareholder returns have been strong over the same time, which is certainly a positive sign. We do not think CEO compensation is a problem, but shareholders will probably want to see an increase in EPS before agreeing the business should pay any more.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for MicroPort Scientific you should be aware of, and 1 of them is a bit concerning.

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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