Danny Wong has been the CEO of China Information Technology Development Limited (HKG:8178) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for China Information Technology Development

How Does Danny Wong’s Compensation Compare With Similar Sized Companies?

Our data indicates that China Information Technology Development Limited is worth HK$566m, and total annual CEO compensation is HK$2.4m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at HK$1.8m. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO compensation in that group is HK$1.7m.

It would therefore appear that China Information Technology Development Limited pays Danny Wong more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at China Information Technology Development, below.

Is China Information Technology Development Limited Growing?

On average over the last three years, China Information Technology Development Limited has grown earnings per share (EPS) by 27% each year. It achieved revenue growth of 39% over the last year.

This demonstrates that the company has been improving recently. A good result. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly.

Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has China Information Technology Development Limited Been A Good Investment?

Given the total loss of 56% over three years, many shareholders in China Information Technology Development Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We examined the amount China Information Technology Development 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.

However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. So you may want to check if insiders are buying China Information Technology Development shares with their own money (free access).

Or you might prefer examine intently this intuitive graph showing past earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.