Is Lifestyle China Group Limited’s (HKG:2136) CEO Salary Justified? - Simply Wall St

Is Lifestyle China Group Limited’s (HKG:2136) CEO Salary Justified? - Simply Wall St

Thomas Lau is the CEO of Lifestyle China Group Limited (HKG:2136). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Lifestyle China Group

How Does Thomas Lau’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Lifestyle China Group Limited has a market cap of HK$3.4b, and reported total annual CEO compensation of CN¥15m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CN¥6.1m. We looked at a group of companies with market capitalizations from CN¥1.4b to CN¥5.6b, and the median CEO total compensation was CN¥2.3m.

Thus we can conclude that Thomas Lau receives more in total compensation than the median of a group of companies in the same market, and of similar size to Lifestyle China Group 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 Lifestyle China Group has changed over time.

SEHK:2136 CEO Compensation, December 9th 2019

Is Lifestyle China Group Limited Growing?

On average over the last three years, Lifestyle China Group Limited has grown earnings per share (EPS) by 12% each year (using a line of best fit). In the last year, its revenue is down 3.8%.

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 you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Lifestyle China Group Limited Been A Good Investment?

Lifestyle China Group Limited has generated a total shareholder return of 16% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

We examined the amount Lifestyle China Group 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. We also note that, over the same time frame, shareholder returns haven’t been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. Shareholders may want to check for free if Lifestyle China Group insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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2019-12-09 03:03:02Z
https://simplywall.st/stocks/hk/retail/hkg-2136/lifestyle-china-group-shares/news/is-lifestyle-china-group-limiteds-hkg2136-ceo-salary-justified/

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