This article will reflect on the compensation paid to Alvin Liu who has served as CEO of A8 New Media Group Limited (HKG:800) since 2000. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for A8 New Media Group.
Check out our latest analysis for A8 New Media Group
Comparing A8 New Media Group Limited's CEO Compensation With the industry
Our data indicates that A8 New Media Group Limited has a market capitalization of HK$423m, and total annual CEO compensation was reported as CN¥2.0m for the year to December 2019. Notably, that's an increase of 59% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥120k.
For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.1m. This suggests that Alvin Liu is paid more than the median for the industry. What's more, Alvin Liu holds HK$14m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CN¥120k | CN¥120k | 6% |
| Other | CN¥1.9m | CN¥1.2m | 94% |
| Total Compensation | CN¥2.0m | CN¥1.3m | 100% |
On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. A8 New Media Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at A8 New Media Group Limited's Growth Numbers
Over the last three years, A8 New Media Group Limited has shrunk its earnings per share by 38% per year. Its revenue is down 29% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has A8 New Media Group Limited Been A Good Investment?
With a three year total loss of 65% for the shareholders, A8 New Media Group Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As previously discussed, Alvin is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for A8 New Media Group that investors should be aware of in a dynamic business environment.
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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About SEHK:800
A8 New Media Group
An investment holding company, engages in the property investment and cultural businesses primarily in the People’s Republic of China.
Flawless balance sheet with proven track record.
