The CEO of Hi Sun Technology (China) Limited (HKG:818) is Man Kui. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does Man Kui’s Compensation Compare With Similar Sized Companies?
According to our data, Hi Sun Technology (China) Limited has a market capitalization of HK$3.4b, and pays its CEO total annual compensation worth HK$8.5m. (This is based on the year to December 2018). That’s a notable increase of 8.8% on last year. While we always look at total compensation first, we note that the salary component is less, at HK$2.3m. When we examined a selection of companies with market caps ranging from HK$1.6b to HK$6.3b, we found the median CEO total compensation was HK$1.9m.
Thus we can conclude that Man Kui receives more in total compensation than the median of a group of companies in the same market, and of similar size to Hi Sun Technology (China) Limited. However, this doesn’t necessarily mean the pay is too high. 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 Hi Sun Technology (China) has changed from year to year.
Is Hi Sun Technology (China) Limited Growing?
On average over the last three years, Hi Sun Technology (China) Limited has grown earnings per share (EPS) by 5.5% each year (using a line of best fit). In the last year, its revenue is up 60%.
It’s great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. So while I’d stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Shareholders might be interested in this free visualization of analyst forecasts.
Has Hi Sun Technology (China) Limited Been A Good Investment?
Hi Sun Technology (China) Limited has generated a total shareholder return of 16% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
We examined the amount Hi Sun Technology (China) Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. Shareholders may want to check for free if Hi Sun Technology (China) insiders are buying or selling shares.
Important note: Hi Sun Technology (China) may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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