Is Yestar Healthcare Holdings Company Limited's (HKG:2393) CEO Pay Justified?

Simply Wall St
Simply Wall St.

The CEO of Yestar Healthcare Holdings Company Limited (HKG:2393) is James Hartono. 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 Yestar Healthcare Holdings

Scroll to continue with content
Ad

How Does James Hartono's Compensation Compare With Similar Sized Companies?

According to our data, Yestar Healthcare Holdings Company Limited has a market capitalization of HK$2.8b, and paid its CEO total annual compensation worth CN¥4.4m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥3.2m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CN¥1.4b to CN¥5.7b. The median total CEO compensation was CN¥2.4m.

Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 63% of total compensation represents salary and 37% is other remuneration. So it seems like there isn't a significant difference between Yestar Healthcare Holdings and the broader market, in terms of salary allocation in the overall compensation package.

Thus we can conclude that James Hartono receives more in total compensation than the median of a group of companies in the same market, and of similar size to Yestar Healthcare Holdings Company 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 a visual representation of the CEO compensation at Yestar Healthcare Holdings, below.

SEHK:2393 CEO Compensation March 27th 2020
SEHK:2393 CEO Compensation March 27th 2020

Is Yestar Healthcare Holdings Company Limited Growing?

Yestar Healthcare Holdings Company Limited has seen earnings per share (EPS) move positively by an average of 9.7% a year, over the last three years (using a line of best fit). Its revenue is up 12% over last year.

I would argue that the modest growth in revenue is a notable positive. And the improvement in earnings per share is modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. It could be important to check this free visual depiction of what analysts expect for the future.

Has Yestar Healthcare Holdings Company Limited Been A Good Investment?

With a three year total loss of 68%, Yestar Healthcare Holdings Company Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We examined the amount Yestar Healthcare Holdings Company Limited pays its CEO, and compared it to the amount paid by 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. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. On another note, Yestar Healthcare Holdings has 4 warning signs (and 1 which is concerning) we think you should know about.

If you want to buy a stock that is better than Yestar Healthcare Holdings, this free list of high return, low debt companies is a great place to look.

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.

What to Read Next