William Chan became the CEO of Rykadan Capital Limited (HKG:2288) in 2012. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Rykadan Capital

How Does William Chan’s Compensation Compare With Similar Sized Companies?

Our data indicates that Rykadan Capital Limited is worth HK$301m, and total annual CEO compensation is HK$20m. (This figure is for the year to 2018). We think total compensation is more important but we note that the CEO salary is lower, at HK$12m. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO compensation was HK$1.7m.

As you can see, William Chan is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Rykadan Capital Limited is paying too much. 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 Rykadan Capital has changed over time.

Is Rykadan Capital Limited Growing?

Rykadan Capital Limited has increased its earnings per share (EPS) by an average of 15% a year, over the last three years (using a line of best fit). In the last year, its revenue is down -50%.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end.

Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Rykadan Capital Limited Been A Good Investment?

Given the total loss of 24% over three years, many shareholders in Rykadan Capital Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We examined the amount Rykadan Capital Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. Whatever your view on compensation, you might want to check if insiders are buying or selling Rykadan Capital shares (free trial).

Or you might rather take a peek at this analytical visualization of historic cash flow, earnings 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 [email protected].