It's Unlikely That BAIOO Family Interactive Limited's (HKG:2100) CEO Will See A Huge Pay Rise This Year

Performance at BAIOO Family Interactive Limited (HKG:2100) has been reasonably good and CEO Jian Dai has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 25 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for BAIOO Family Interactive

How Does Total Compensation For Jian Dai Compare With Other Companies In The Industry?

At the time of writing, our data shows that BAIOO Family Interactive Limited has a market capitalization of HK$4.5b, and reported total annual CEO compensation of CN¥1.6m for the year to December 2020. This means that the compensation hasn't changed much from last year. In particular, the salary of CN¥1.38m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from HK$1.6b to HK$6.2b, the reported median CEO total compensation was CN¥1.1m. Accordingly, our analysis reveals that BAIOO Family Interactive Limited pays Jian Dai north of the industry median. Furthermore, Jian Dai directly owns HK$1.2b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	CN¥1.4m	CN¥1.4m	87%
Other	CN¥200k	CN¥229k	13%
Total Compensation	CN¥1.6m	CN¥1.6m	100%

On an industry level, roughly 88% of total compensation represents salary and 12% is other remuneration. There isn't a significant difference between BAIOO Family Interactive and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

BAIOO Family Interactive Limited's Growth

Over the past three years, BAIOO Family Interactive Limited has seen its earnings per share (EPS) grow by 108% per year. It achieved revenue growth of 65% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has BAIOO Family Interactive Limited Been A Good Investment?

We think that the total shareholder return of 239%, over three years, would leave most BAIOO Family Interactive Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for BAIOO Family Interactive you should be aware of, and 1 of them is 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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