Xiaobo Zhao has been the CEO of Technovator International Limited (HKG:1206) since 2011, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Technovator International pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Xiaobo Zhao Compare With Other Companies In The Industry?
According to our data, Technovator International Limited has a market capitalization of HK$540m, and paid its CEO total annual compensation worth CN¥1.6m over the year to December 2019. Notably, that's an increase of 14% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥600k.
In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.6m. From this we gather that Xiaobo Zhao is paid around the median for CEOs in the industry. What's more, Xiaobo Zhao holds HK$6.0m 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 76% of total compensation represents salary, while the remainder of 24% is other remuneration. Technovator International sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Technovator International Limited's Growth
Over the last three years, Technovator International Limited has shrunk its earnings per share by 28% per year. In the last year, its revenue is down 11%.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Technovator International Limited Been A Good Investment?
With a three year total loss of 71% for the shareholders, Technovator International Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, Technovator International pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Technovator International (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Technovator International, 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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