Annie Cheng is the CEO of Upbest Group Limited (HKG:335), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Upbest Group.
Check out our latest analysis for Upbest Group
How Does Total Compensation For Annie Cheng Compare With Other Companies In The Industry?
At the time of writing, our data shows that Upbest Group Limited has a market capitalization of HK$2.3b, and reported total annual CEO compensation of HK$583k for the year to March 2020. That's just a smallish increase of 4.1% on last year. We note that the salary portion, which stands at HK$542.0k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the same industry with market capitalizations ranging between HK$775m and HK$3.1b had a median total CEO compensation of HK$1.3m. This suggests that Annie Cheng is paid below the industry median.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$542k | HK$519k | 93% |
| Other | HK$41k | HK$41k | 7% |
| Total Compensation | HK$583k | HK$560k | 100% |
Speaking on an industry level, nearly 92% of total compensation represents salary, while the remainder of 8.1% is other remuneration. Our data reveals that Upbest Group allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Upbest Group Limited's Growth Numbers
Upbest Group Limited has reduced its earnings per share by 42% a year over the last three years. Its revenue is up 12% over the last year.
The decline in EPS is a bit concerning. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Upbest Group Limited Been A Good Investment?
Given the total shareholder loss of 11% over three years, many shareholders in Upbest Group 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...
As previously discussed, Annie is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. EPS growth has failed to impress us, and the same can be said about shareholder returns. It's tough to say that Annie is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which is a bit concerning) in Upbest Group we think you should know about.
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:335
Upbest Group
An investment holding company, offers a range of financial services primarily in Hong Kong, Macau, and the People’s Republic of China.
Excellent balance sheet second-rate dividend payer.
