What Does Dynamic Electronics' (TPE:6251) CEO Pay Reveal?

Ken Huang became the CEO of Dynamic Electronics Co., Ltd. (TPE:6251) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Dynamic Electronics pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Dynamic Electronics

Comparing Dynamic Electronics Co., Ltd.'s CEO Compensation With the industry

At the time of writing, our data shows that Dynamic Electronics Co., Ltd. has a market capitalization of NT$5.2b, and reported total annual CEO compensation of NT$6.6m for the year to December 2019. We note that's an increase of 57% above last year. In particular, the salary of NT$6.44m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from NT$2.8b to NT$11b, the reported median CEO total compensation was NT$5.0m. This suggests that Ken Huang is paid more than the median for the industry.

On an industry level, roughly 91% of total compensation represents salary and 9.3% is other remuneration. Dynamic Electronics pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Dynamic Electronics Co., Ltd.'s Growth Numbers

Over the past three years, Dynamic Electronics Co., Ltd. has seen its earnings per share (EPS) grow by 91% per year. Its revenue is down 7.3% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Dynamic Electronics Co., Ltd. Been A Good Investment?

Boasting a total shareholder return of 62% over three years, Dynamic Electronics Co., Ltd. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Dynamic Electronics pays its CEO a majority of compensation through a salary. As we noted earlier, Dynamic Electronics pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. Given the strong history of shareholder returns, the shareholders are probably very happy with Ken's performance.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Dynamic Electronics that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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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