Jinlan Liu has been the CEO of SinoMedia Holding Limited (HKG:623) since 1999. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Jinlan Liu’s Compensation Compare With Similar Sized Companies?
According to our data, SinoMedia Holding Limited has a market capitalization of HK$884m, and pays its CEO total annual compensation worth CN¥2.8m. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at CN¥1.8m. We examined a group of similar sized companies, with market capitalizations of below CN¥1.3b. The median CEO total compensation in that group is CN¥1.3m.
Thus we can conclude that Jinlan Liu receives more in total compensation than the median of a group of companies in the same market, and of similar size to SinoMedia Holding Limited. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at SinoMedia Holding has changed from year to year.
Is SinoMedia Holding Limited Growing?
On average over the last three years, SinoMedia Holding Limited has grown earnings per share (EPS) by 33% each year (using a line of best fit). It achieved revenue growth of 9.7% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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 you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has SinoMedia Holding Limited Been A Good Investment?
With a three year total loss of 2.4%, SinoMedia Holding Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We examined the amount SinoMedia Holding Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling SinoMedia Holding shares (free trial).
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.
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