Yahoo Finance How Should Investors Feel About Lenovo Group Limited’s (HKG:992) CEO Pay?
Yuanqing Yang has been the CEO of Lenovo Group Limited (HKG:992) since 2009. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. 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.
Check out our latest analysis for Lenovo Group
How Does Yuanqing Yang’s Compensation Compare With Similar Sized Companies?
Our data indicates that Lenovo Group Limited is worth HK$62b, and total annual CEO compensation is US$19m. (This number is for the twelve months until 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.4m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$568k.
As you can see, Yuanqing Yang is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Lenovo Group 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 a visual representation of the CEO compensation at Lenovo Group, below.
Is Lenovo Group Limited Growing?
Over the last three years Lenovo Group Limited has grown its earnings per share (EPS) by an average of 4.5% per year (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, while modest, the earnings per share growth is noticeable. So while performance isn’t amazing, we think it really does seem quite respectable.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Lenovo Group Limited Been A Good Investment?
With a three year total loss of 4.7%, Lenovo Group 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 Lenovo Group 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.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Lenovo Group (free visualization of insider trades).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
