Andrew Lo became the CEO of EFT Solutions Holdings Limited (HKG:8062) in 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for EFT Solutions Holdings
How Does Andrew Lo's Compensation Compare With Similar Sized Companies?
Our data indicates that EFT Solutions Holdings Limited is worth HK$55m, and total annual CEO compensation was reported as HK$1.5m for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at HK$1.3m. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO total compensation in that group is HK$1.8m.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where EFT Solutions Holdings stands. Speaking on an industry level, we can see that nearly 78% of total compensation represents salary, while the remainder of 22% is other remuneration. Our data reveals that EFT Solutions Holdings allocates salary in line with the wider market.
So Andrew Lo receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. You can see, below, how CEO compensation at EFT Solutions Holdings has changed over time.
Is EFT Solutions Holdings Limited Growing?
EFT Solutions Holdings Limited has seen earnings per share (EPS) move positively by an average of 12% a year, over the last three years (using a line of best fit). It achieved revenue growth of 9.4% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has EFT Solutions Holdings Limited Been A Good Investment?
Since shareholders would have lost about 56% over three years, some EFT Solutions Holdings Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Andrew Lo is paid around the same as most CEOs of similar size companies.
We like that the company is growing EPS, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. On another note, EFT Solutions Holdings has 5 warning signs (and 2 which make us uncomfortable) we think you should know about.
If you want to buy a stock that is better than EFT Solutions Holdings, 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. Thank you for reading.