Does CCID Consulting Company Limited’s (HKG:8235) CEO Pay Reflect Performance?

In 2016 Huifeng Sun was appointed CEO of CCID Consulting Company Limited (HKG:8235). 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for CCID Consulting

How Does Huifeng Sun’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that CCID Consulting Company Limited has a market cap of HK$156m, and is paying total annual CEO compensation of CN¥981k. We note that’s an increase of 41% above last year. We examined a group of similar sized companies, with market capitalizations of below CN¥1.4b. The median CEO compensation in that group is CN¥1m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.

The graphic below shows how CEO compensation at CCID Consulting has changed from year to year.

SEHK:8235 CEO Compensation October 29th 18
SEHK:8235 CEO Compensation October 29th 18

Is CCID Consulting Company Limited Growing?

Over the last three years CCID Consulting Company Limited has grown its earnings per share (EPS) by an average of 31% per year. It achieved revenue growth of 28% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. We don’t have analyst forecasts, but shareholders might want to examine this free detailed historical graph of earnings, revenue and cash flow.

Has CCID Consulting Company Limited Been A Good Investment?

Since shareholders would have lost about 34% over three years, some CCID Consulting Company Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

It appears that CCID Consulting Company Limited remunerates its CEO below most similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. We’re not critical of the remuneration Huifeng Sun receives, but it would be good to see improved returns to shareholders before the remuneration grows too much.

This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. I like to research companies that do not pay too much to the CEO. For example you might check if insiders are buying shares.

If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.