Does Automated Systems Holdings Limited's (HKG:771) CEO Pay Compare Well With Peers?

Yueou Wang has been the CEO of Automated Systems Holdings Limited (HKG:771) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Automated Systems Holdings

How Does Yueou Wang's Compensation Compare With Similar Sized Companies?

According to our data, Automated Systems Holdings Limited has a market capitalization of HK$662m, and paid its CEO total annual compensation worth HK$8.6m over the year to December 2019. That's a notable increase of 14% on last year. We think total compensation is more important but we note that the CEO salary is lower, at HK$2.6m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO total compensation in that group is HK$1.7m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Automated Systems Holdings. Talking in terms of the sector, salary represented approximately 72% of total compensation out of all the companies we analysed, while other remuneration made up 28% of the pie. It's interesting to note that Automated Systems Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry.

As you can see, Yueou Wang is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Automated Systems Holdings Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. The graphic below shows how CEO compensation at Automated Systems Holdings has changed from year to year.

Is Automated Systems Holdings Limited Growing?

Over the last three years Automated Systems Holdings Limited has seen earnings per share (EPS) move in a positive direction by an average of 23% per year (using a line of best fit). Its revenue is up 21% over last year.

This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Automated Systems Holdings Limited Been A Good Investment?

Automated Systems Holdings Limited has generated a total shareholder return of 0.9% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We compared the total CEO remuneration paid by Automated Systems Holdings Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. On another note, we've spotted 4 warning signs for Automated Systems Holdings that investors should look into moving forward.

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.

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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. Thank you for reading.