What Can We Learn About Ahsay Backup Software Development's (HKG:8290) CEO Compensation?

Schubert Chong became the CEO of Ahsay Backup Software Development Company Limited (HKG:8290) in 2015, 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.

Check out our latest analysis for Ahsay Backup Software Development

Comparing Ahsay Backup Software Development Company Limited's CEO Compensation With the industry

Our data indicates that Ahsay Backup Software Development Company Limited has a market capitalization of HK$50m, and total annual CEO compensation was reported as HK$3.7m for the year to December 2019. Notably, that's an increase of 23% over the year before. We note that the salary portion, which stands at HK$3.02m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.0m. Hence, we can conclude that Schubert Chong is remunerated higher than the industry median.

Talking in terms of the industry, salary represented approximately 82% of total compensation out of all the companies we analyzed, while other remuneration made up 18% of the pie. Ahsay Backup Software Development 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.

A Look at Ahsay Backup Software Development Company Limited's Growth Numbers

Ahsay Backup Software Development Company Limited has reduced its earnings per share by 6.8% a year over the last three years. It saw its revenue drop 6.3% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Ahsay Backup Software Development Company Limited Been A Good Investment?

With a three year total loss of 71% for the shareholders, Ahsay Backup Software Development Company Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, Schubert is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Ahsay Backup Software Development you should be aware of, and 2 of them are a bit concerning.

Important note: Ahsay Backup Software Development is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.
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