How Does NetDragon Websoft Holdings' (HKG:777) CEO Salary Compare to Peers?

The CEO of NetDragon Websoft Holdings Limited (HKG:777) is Luyuan Liu, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for NetDragon Websoft Holdings.

Check out our latest analysis for NetDragon Websoft Holdings

How Does Total Compensation For Luyuan Liu Compare With Other Companies In The Industry?

At the time of writing, our data shows that NetDragon Websoft Holdings Limited has a market capitalization of HK$8.9b, and reported total annual CEO compensation of CN¥880k for the year to December 2019. We note that's an increase of 8.6% above last year. In particular, the salary of CN¥850.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between HK$3.1b and HK$12b had a median total CEO compensation of CN¥880k. So it looks like NetDragon Websoft Holdings compensates Luyuan Liu in line with the median for the industry. Furthermore, Luyuan Liu directly owns HK$353m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. NetDragon Websoft Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

NetDragon Websoft Holdings Limited's Growth

Over the past three years, NetDragon Websoft Holdings Limited has seen its earnings per share (EPS) grow by 78% per year. It achieved revenue growth of 13% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 NetDragon Websoft Holdings Limited Been A Good Investment?

With a three year total loss of 14% for the shareholders, NetDragon Websoft Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Luyuan receives almost all of their compensation through a salary. As we touched on above, NetDragon Websoft Holdings Limited 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. At the same time, the company has logged negative shareholder returns over the last three years. But on the bright side, EPS growth is positive over the same period. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for NetDragon Websoft Holdings that investors should think about before committing capital to this stock.

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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