Is Perfect Optronics Limited’s (HKG:8311) CEO Pay Fair?

Wai Tak Cheng is the CEO of Perfect Optronics Limited (HKG:8311). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. 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.

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See our latest analysis for Perfect Optronics

How Does Wai Tak Cheng’s Compensation Compare With Similar Sized Companies?

According to our data, Perfect Optronics Limited has a market capitalization of HK$359m, and pays its CEO total annual compensation worth HK$5.2m. (This is based on the year to December 2018). That’s a fairly small increase of 0.3% on year before. Notably, the salary of HK$5.2m is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.5m.

As you can see, Wai Tak Cheng is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Perfect Optronics 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.

You can see a visual representation of the CEO compensation at Perfect Optronics, below.

SEHK:8311 CEO Compensation, May 25th 2019
SEHK:8311 CEO Compensation, May 25th 2019

Is Perfect Optronics Limited Growing?

Over the last three years Perfect Optronics Limited has shrunk its earnings per share by an average of 87% per year (measured with a line of best fit). It saw its revenue drop -25% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. 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. Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Perfect Optronics Limited Been A Good Investment?

Since shareholders would have lost about 79% over three years, some Perfect Optronics Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We examined the amount Perfect Optronics Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

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

Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! So you may want to check if insiders are buying Perfect Optronics shares with their own money (free access).

If you want to buy a stock that is better than Perfect Optronics, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.