In This Article:
Yao Zhao became the CEO of Fountain Set (Holdings) Limited (HKG:420) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. 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. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Fountain Set (Holdings)
How Does Yao Zhao's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Fountain Set (Holdings) Limited has a market cap of HK$1.5b, and reported total annual CEO compensation of HK$4.8m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$3.3m. We looked at a group of companies with market capitalizations from HK$784m to HK$3.1b, and the median CEO total compensation was HK$2.3m.
Thus we can conclude that Yao Zhao receives more in total compensation than the median of a group of companies in the same market, and of similar size to Fountain Set (Holdings) Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Fountain Set (Holdings) has changed over time.
Is Fountain Set (Holdings) Limited Growing?
On average over the last three years, Fountain Set (Holdings) Limited has grown earnings per share (EPS) by 10% each year (using a line of best fit). Its revenue is down 4.3% over last year.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Fountain Set (Holdings) Limited Been A Good Investment?
Most shareholders would probably be pleased with Fountain Set (Holdings) Limited for providing a total return of 49% over three years. 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...
We examined the amount Fountain Set (Holdings) Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.