Here's What We Learned About The CEO Pay At Cogobuy Group (HKG:400)

Jeffrey Kang became the CEO of Cogobuy Group (HKG:400) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Cogobuy Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Cogobuy Group

Comparing Cogobuy Group's CEO Compensation With the industry

At the time of writing, our data shows that Cogobuy Group has a market capitalization of HK$2.2b, and reported total annual CEO compensation of CN¥1.0m for the year to December 2019. That is, the compensation was roughly the same as last year. Notably, the salary which is CN¥1.00m, represents most of the total compensation being paid.

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 CN¥2.4m. This suggests that Jeffrey Kang is paid below the industry median. Furthermore, Jeffrey Kang directly owns HK$1.0b worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. Cogobuy Group pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Cogobuy Group's Growth

Over the last three years, Cogobuy Group has shrunk its earnings per share by 31% per year. In the last year, its revenue is up 23%.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Cogobuy Group Been A Good Investment?

Given the total shareholder loss of 63% over three years, many shareholders in Cogobuy Group are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Cogobuy Group pays its CEO a majority of compensation through a salary. As we touched on above, Cogobuy Group is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But Cogobuy Group has recorded negative shareholder returns and EPS growth over the last three years. In contrast, revenues have increased more recently. So, although Jeffrey is modestly paid, shareholders might want to see positive shareholder returns before warming to the idea of a raise.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Cogobuy Group 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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