Is Beijing Capital Grand Limited (HKG:1329) Overpaying Its CEO?
In 2017 Yujian Feng was appointed CEO of Beijing Capital Grand Limited (HKG:1329). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Beijing Capital Grand
How Does Yujian Feng's Compensation Compare With Similar Sized Companies?
Our data indicates that Beijing Capital Grand Limited is worth HK$2.7b, and total annual CEO compensation was reported as CN¥4.0m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥1.4m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from CN¥1.4b to CN¥5.6b, we found the median CEO total compensation was CN¥2.4m.
It would therefore appear that Beijing Capital Grand Limited pays Yujian Feng more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Beijing Capital Grand has changed from year to year.
Is Beijing Capital Grand Limited Growing?
Beijing Capital Grand Limited has reduced its earnings per share by an average of 117% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 248%.
Investors should note that, over three years, earnings per share are down. But on the other hand, revenue growth is strong, suggesting a brighter future. 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. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Beijing Capital Grand Limited Been A Good Investment?
Given the total loss of 59% over three years, many shareholders in Beijing Capital Grand Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We compared the total CEO remuneration paid by Beijing Capital Grand 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.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Beijing Capital Grand.
If you want to buy a stock that is better than Beijing Capital Grand, 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.
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