Why Overseas Chinese Town (Asia) Holdings Limited's (HKG:3366) CEO Pay Matters To You

In 2010 Mei Xie was appointed CEO of Overseas Chinese Town (Asia) Holdings Limited (HKG:3366). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Overseas Chinese Town (Asia) Holdings

How Does Mei Xie's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Overseas Chinese Town (Asia) Holdings Limited has a market cap of HK$1.6b, and reported total annual CEO compensation of CN¥2.7m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥1.3m. We examined companies with market caps from CN¥710m to CN¥2.8b, and discovered that the median CEO total compensation of that group was CN¥2.1m.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Overseas Chinese Town (Asia) Holdings stands. On an industry level, roughly 72% of total compensation represents salary and 28% is other remuneration. Overseas Chinese Town (Asia) Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry.

So Mei Xie receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. The graphic below shows how CEO compensation at Overseas Chinese Town (Asia) Holdings has changed from year to year.

Is Overseas Chinese Town (Asia) Holdings Limited Growing?

Over the last three years Overseas Chinese Town (Asia) Holdings Limited has seen earnings per share (EPS) move in a positive direction by an average of 15% per year (using a line of best fit). It saw its revenue drop 57% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Overseas Chinese Town (Asia) Holdings Limited Been A Good Investment?

With a three year total loss of 11%, Overseas Chinese Town (Asia) Holdings Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Mei Xie is paid around what is normal for the leaders of comparable size companies.

We'd say the company can boast of its EPS growth, but we find the returns over the last three years to be lacking. Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. Taking a breather from CEO compensation, we've spotted 6 warning signs for Overseas Chinese Town (Asia) Holdings (of which 1 shouldn't be ignored!) you should know about in order to have a holistic understanding of the stock.

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.

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