Does Sing Lee Software (Group)'s (HKG:8076) CEO Salary Compare Well With Industry Peers?

Xue Lin became the CEO of Sing Lee Software (Group) Limited (HKG:8076) in 2017, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Sing Lee Software (Group)

Comparing Sing Lee Software (Group) Limited's CEO Compensation With the industry

At the time of writing, our data shows that Sing Lee Software (Group) Limited has a market capitalization of HK$96m, and reported total annual CEO compensation of CN¥648k for the year to December 2019. That's a slightly lower by 7.8% over the previous year. In particular, the salary of CN¥479.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥883k. From this we gather that Xue Lin is paid around the median for CEOs in the industry. What's more, Xue Lin holds HK$691k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 82% of total compensation represents salary, while the remainder of 18% is other remuneration. Sing Lee Software (Group) is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Sing Lee Software (Group) Limited's Growth

Sing Lee Software (Group) Limited has reduced its earnings per share by 41% a year over the last three years. In the last year, its revenue is down 16%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Sing Lee Software (Group) Limited Been A Good Investment?

Since shareholders would have lost about 54% over three years, some Sing Lee Software (Group) Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Xue is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 4 warning signs for Sing Lee Software (Group) that investors should look into moving forward.

Switching gears from Sing Lee Software (Group), 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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