Man Bun Lee became the CEO of Lee and Man Paper Manufacturing Limited (HKG:2314) in 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.

See our latest analysis for Lee and Man Paper Manufacturing

How Does Man Bun Lee's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Lee and Man Paper Manufacturing Limited has a market cap of HK$20b, and reported total annual CEO compensation of HK$17m for the year to December 2019. We think total compensation is more important but we note that the CEO salary is lower, at HK$1.7m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$16b to HK$50b. The median total CEO compensation was HK$3.9m.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. Lee and Man Paper Manufacturing sets aside a smaller share of compensation for salary, in comparison to the overall industry.

As you can see, Man Bun Lee is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Lee and Man Paper Manufacturing Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. You can see, below, how CEO compensation at Lee and Man Paper Manufacturing has changed over time.

Is Lee and Man Paper Manufacturing Limited Growing?

Lee and Man Paper Manufacturing Limited has seen earnings per share (EPS) move positively by an average of 2.5% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 16%.

I generally like to see a little revenue growth, but I'm happy with the EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.

Has Lee and Man Paper Manufacturing Limited Been A Good Investment?

With a three year total loss of 8.6%, Lee and Man Paper Manufacturing Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared the total CEO remuneration paid by Lee and Man Paper Manufacturing Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Shifting gears from CEO pay for a second, we've picked out 3 warning signs for Lee and Man Paper Manufacturing 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.