In This Article:
In 2016 Chung Yau was appointed CEO of AL Group Limited (HKG:8360). First, this article will compare CEO compensation with compensation at similar sized companies. 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 process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for AL Group
How Does Chung Yau's Compensation Compare With Similar Sized Companies?
According to our data, AL Group Limited has a market capitalization of HK$29m, and pays its CEO total annual compensation worth HK$1.5m. (This figure is for the year to December 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth HK$1.4m. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO total compensation in that group is HK$1.9m.
So Chung Yau receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at AL Group, below.
Is AL Group Limited Growing?
AL Group Limited has reduced its earnings per share by an average of 110% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 4.5% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has AL Group Limited Been A Good Investment?
Since shareholders would have lost about 88% over three years, some AL Group Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Remuneration for Chung Yau is close enough to the median pay for a CEO of a similar sized company .
After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Few would argue that it's wise for the company to pay any more, before returns improve. Whatever your view on compensation, you might want to check if insiders are buying or selling AL Group shares (free trial).