Is Novatek Microelectronics Corp.'s (TPE:3034) CEO Paid At A Competitive Rate?

In 2001, Steve Wang was appointed CEO of Novatek Microelectronics Corp. (TPE:3034). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Novatek Microelectronics

How Does Steve Wang's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Novatek Microelectronics Corp. has a market cap of NT$126b, and reported total annual CEO compensation of NT$1.5m for the year to December 2018. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of NT$60b to NT$192b. The median total CEO compensation was NT$18m.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Novatek Microelectronics stands. Talking in terms of the sector, salary represented approximately 85% of total compensation out of all the companies we analysed, while other remuneration made up 15% of the pie. When we boil it down to the company level, Novatek Microelectronics prefers to reward Steve Wang through non-salary compensation, since it does not pay a salary.

Most shareholders would consider it a positive that Steve Wang takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business. You can see a visual representation of the CEO compensation at Novatek Microelectronics, below.

Is Novatek Microelectronics Corp. Growing?

On average over the last three years, Novatek Microelectronics Corp. has seen earnings per share (EPS) move in a favourable direction by 23% each year (using a line of best fit). In the last year, its revenue is up 12%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.

Has Novatek Microelectronics Corp. Been A Good Investment?

I think that the total shareholder return of 106%, over three years, would leave most Novatek Microelectronics Corp. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Novatek Microelectronics Corp. is currently paying its CEO below what is normal for companies of its size.

Many would consider this to indicate that the pay is modest since the business is growing. And given most shareholders are probably very happy with recent returns, you might even think that Steve Wang deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. Shifting gears from CEO pay for a second, we've picked out 2 warning signs for Novatek Microelectronics that investors should be aware of in a dynamic business environment.

If you want to buy a stock that is better than Novatek Microelectronics, 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.