Is E Lighting Group Holdings Limited’s (HKG:8222) CEO Being Overpaid?

The CEO of E Lighting Group Holdings Limited (HKG:8222) is Raymond Hui. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for E Lighting Group Holdings

How Does Raymond Hui’s Compensation Compare With Similar Sized Companies?

According to our data, E Lighting Group Holdings Limited has a market capitalization of HK$53m, and pays its CEO total annual compensation worth HK$1.5m. (This is based on the year to March 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth HK$1.5m. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO compensation was HK$1.5m.

So Raymond Hui is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at E Lighting Group Holdings, below.

SEHK:8222 CEO Compensation, March 12th 2019
SEHK:8222 CEO Compensation, March 12th 2019

Is E Lighting Group Holdings Limited Growing?

On average over the last three years, E Lighting Group Holdings Limited has shrunk earnings per share by 88% each year (measured with a line of best fit). In the last year, its revenue is down -4.5%.

Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has E Lighting Group Holdings Limited Been A Good Investment?

With a three year total loss of 66%, E Lighting Group Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

Raymond Hui is paid around what is normal the leaders of comparable size companies.

Returns have been disappointing and the company is not growing its earnings per share. Suffice it to say, we don’t think the CEO is underpaid! Shareholders may want to check for free if E Lighting Group Holdings insiders are buying or selling shares.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.