What We Learned About China Ludao Technology's (HKG:2023) CEO Pay

The CEO of China Ludao Technology Company Limited (HKG:2023) is Yuerong Yu, and this article examines the executive's compensation against the backdrop of overall company performance. 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 China Ludao Technology

Comparing China Ludao Technology Company Limited's CEO Compensation With the industry

At the time of writing, our data shows that China Ludao Technology Company Limited has a market capitalization of HK$487m, and reported total annual CEO compensation of CN¥1.1m for the year to December 2019. That's a modest increase of 6.0% on the prior year. We note that the salary portion, which stands at CN¥1.08m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥646k. This suggests that Yuerong Yu is paid more than the median for the industry. What's more, Yuerong Yu holds HK$229m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 71% of total compensation represents salary and 29% is other remuneration. China Ludao Technology is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

China Ludao Technology Company Limited's Growth

Over the past three years, China Ludao Technology Company Limited has seen its earnings per share (EPS) grow by 21% per year. Its revenue is up 9.9% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 China Ludao Technology Company Limited Been A Good Investment?

Given the total shareholder loss of 40% over three years, many shareholders in China Ludao Technology Company Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

China Ludao Technology pays its CEO a majority of compensation through a salary. As we touched on above, China Ludao Technology Company Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the EPS growth is certainly impressive, but it's disappointing to see negative shareholder returns over the same period. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

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 2 warning signs for China Ludao Technology that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

When trading China Ludao Technology or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.