Jia Xu has been the CEO of Sunbridge Group Limited (ASX:SBB) since 2013. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Sunbridge Group
How Does Jia Xu’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Sunbridge Group Limited has a market cap of AU$9.0m, and is paying total annual CEO compensation of AU$131k. (This is based on the year to 2016). We think total compensation is more important but we note that the CEO salary is lower, at AU$117k. We took a group of companies with market capitalizations below AU$277m, and calculated the median CEO compensation to be AU$363k.
A first glance this seems like a real positive for shareholders, since Jia Xu is paid less than the average compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Sunbridge Group, below.
Is Sunbridge Group Limited Growing?
On average over the last three years, Sunbridge Group Limited has shrunk earnings per share by 74% each year. It achieved revenue growth of 18% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
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 Sunbridge Group Limited Been A Good Investment?
Since shareholders would have lost about 57% over three years, some Sunbridge Group 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…
It looks like Sunbridge Group Limited pays its CEO less than similar sized companies.
Jia Xu is paid less than CEOs of similar size companies, but the company isn’t growing and total shareholder returns have been disappointing. While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Sunbridge Group (free visualization of insider trades).