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Yuerong Yu is the CEO of China Ludao Technology Company Limited (HKG:2023). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Yuerong Yu’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that China Ludao Technology Company Limited has a market cap of HK$615m, and is paying total annual CEO compensation of CN¥851k. (This number is for the twelve months until December 2017). It is worth noting that the CEO compensation consists almost entirely of the salary, worth CN¥836k. We looked at a group of companies with market capitalizations under CN¥1.4b, and the median CEO total compensation was CN¥1.3m.
A first glance this seems like a real positive for shareholders, since Yuerong Yu is paid less than the average total 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 China Ludao Technology has changed over time.
Is China Ludao Technology Company Limited Growing?
Over the last three years China Ludao Technology Company Limited has grown its earnings per share (EPS) by an average of 12% per year (using a line of best fit). In the last year, its revenue is up 2.4%.
This demonstrates that the company has been improving recently. A good result. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has China Ludao Technology Company Limited Been A Good Investment?
With a three year total loss of 40%, China Ludao Technology Company Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
It appears that China Ludao Technology Company Limited remunerates its CEO below most similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we would not say that Yuerong Yu is generously paid, it would be good to see an improvement in business performance before too an increase in pay.
This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at China Ludao Technology.
Important note: China Ludao Technology 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.