Here's What We Think About AKM Industrial's (HKG:1639) CEO Pay

This article will reflect on the compensation paid to Zhi Qiang Chai who has served as CEO of AKM Industrial Company Limited (HKG:1639) since 2004. This analysis will also assess whether AKM Industrial pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for AKM Industrial

Comparing AKM Industrial Company Limited's CEO Compensation With the industry

According to our data, AKM Industrial Company Limited has a market capitalization of HK$1.4b, and paid its CEO total annual compensation worth HK$1.0m over the year to December 2019. That's a notable decrease of 16% on last year. Notably, the salary which is HK$684.0k, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between HK$775m and HK$3.1b, we discovered that the median CEO total compensation of that group was HK$3.0m. That is to say, Zhi Qiang Chai is paid under the industry median. Moreover, Zhi Qiang Chai also holds HK$7.3m worth of AKM Industrial stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 76% of total compensation represents salary and 24% is other remuneration. AKM Industrial pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

AKM Industrial Company Limited's Growth

AKM Industrial Company Limited's earnings per share (EPS) grew 9.8% per year over the last three years. It achieved revenue growth of 12% over the last year.

We think the revenue growth is good. And the improvement in EPSis modest but respectable. So while performance isn't amazing, we think it really does seem quite respectable. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has AKM Industrial Company Limited Been A Good Investment?

Given the total shareholder loss of 52% over three years, many shareholders in AKM Industrial Company Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, AKM Industrial pays its CEO lower than the norm for similar-sized companies belonging to the same industry. But the EPS growth is lacking, just like the returns (over three years). So while we would not say that Zhi Qiang is generously paid, it would be good to see an improvement in business performance before there is talk about a raise.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling AKM Industrial (free visualization of insider trades).

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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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