Is Goldpac Group Limited (HKG:3315) Overpaying Its CEO?

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In 2011 Ping Hou was appointed CEO of Goldpac Group Limited (HKG:3315). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Goldpac Group

How Does Ping Hou's Compensation Compare With Similar Sized Companies?

According to our data, Goldpac Group Limited has a market capitalization of HK$1.7b, and pays its CEO total annual compensation worth CN¥6.2m. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at CN¥2.4m. We examined companies with market caps from CN¥677m to CN¥2.7b, and discovered that the median CEO compensation of that group was CN¥1.7m.

As you can see, Ping Hou is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Goldpac Group Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Goldpac Group has changed from year to year.

Is Goldpac Group Limited Growing?

On average over the last three years, Goldpac Group Limited has shrunk earnings per share by 12% each year (measured with a line of best fit). It saw its revenue drop -4.3% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last 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 Goldpac Group Limited Been A Good Investment?

Goldpac Group Limited has not done too badly by shareholders, with a total return of 1.7%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

We examined the amount Goldpac Group Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

While shareholder returns are acceptable, they don't delight. So we think more research is needed, but we don't think the CEO underpaid. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Goldpac Group (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist of interesting companies.

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.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.