Does Bamboos Health Care Holdings Limited's (HKG:2293) CEO Pay Matter?

Winsome Hai is the CEO of Bamboos Health Care Holdings Limited (HKG:2293). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Bamboos Health Care Holdings

How Does Winsome Hai's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Bamboos Health Care Holdings Limited has a market cap of HK$392m, and reported total annual CEO compensation of HK$2.3m for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$1.8m. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO total compensation in that group is HK$1.7m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Bamboos Health Care Holdings. Speaking on an industry level, we can see that nearly 80% of total compensation represents salary, while the remainder of 20% is other remuneration. Bamboos Health Care Holdings does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.

Thus we can conclude that Winsome Hai receives more in total compensation than the median of a group of companies in the same market, and of similar size to Bamboos Health Care Holdings 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 Bamboos Health Care Holdings has changed over time.

Is Bamboos Health Care Holdings Limited Growing?

Bamboos Health Care Holdings Limited has seen earnings per share (EPS) move positively by an average of 6.8% a year, over the last three years (using a line of best fit). In the last year, its revenue changed by just 0.9%.

I generally like to see a little revenue growth, but it is good to see EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Bamboos Health Care Holdings Limited Been A Good Investment?

Since shareholders would have lost about 41% over three years, some Bamboos Health Care Holdings Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Bamboos Health Care Holdings Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark 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. Shifting gears from CEO pay for a second, we've picked out 2 warning signs for Bamboos Health Care Holdings that investors should be aware of in a dynamic business environment.

Important note: Bamboos Health Care Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.