Donghui Yu became the CEO of Capinfo Company Limited (HKG:1075) in 2016, 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 Capinfo pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Capinfo
Comparing Capinfo Company Limited's CEO Compensation With the industry
At the time of writing, our data shows that Capinfo Company Limited has a market capitalization of HK$1.1b, and reported total annual CEO compensation of CN„1.3m for the year to December 2019. Notably, that's an increase of 9.9% over the year before. Notably, the salary which is CN„1.21m, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN„1.6m. So it looks like Capinfo compensates Donghui Yu in line with the median for the industry.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CN„1.2m | CN„1.1m | 96% |
| Other | CN„50k | CN„55k | 4% |
| Total Compensation | CN„1.3m | CN„1.1m | 100% |
Talking in terms of the industry, salary represented approximately 60% of total compensation out of all the companies we analyzed, while other remuneration made up 40% of the pie. Capinfo has gone down a largely traditional route, paying Donghui Yu a high salary, giving it preference over non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Capinfo Company Limited's Growth
Capinfo Company Limited's earnings per share (EPS) grew 23% per year over the last three years. In the last year, its revenue is up 13%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Capinfo Company Limited Been A Good Investment?
Given the total shareholder loss of 14% over three years, many shareholders in Capinfo Company Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
Donghui receives almost all of their compensation through a salary. As we touched on above, Capinfo Company 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. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But on the bright side, EPS growth is positive over the same period. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.
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 Capinfo that investors should think about before committing capital to this stock.
Switching gears from Capinfo, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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:1075
Capinfo
Provides information technology (IT) services in the Peopleâs Republic of China.
Good value with adequate balance sheet.
