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Is Beijing Chunlizhengda Medical Instruments Co., Ltd. (HKG:1858) Excessively Paying Its CEO?

Simply Wall St

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Chunbao Shi became the CEO of Beijing Chunlizhengda Medical Instruments Co., Ltd. (HKG:1858) in 2010. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Beijing Chunlizhengda Medical Instruments

How Does Chunbao Shi's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Beijing Chunlizhengda Medical Instruments Co., Ltd. has a market cap of HK$2.5b, and is paying total annual CEO compensation of CN¥1.5m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at CN¥600k. We examined companies with market caps from CN¥1.4b to CN¥5.5b, and discovered that the median CEO total compensation of that group was CN¥2.0m.

So Chunbao Shi receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see, below, how CEO compensation at Beijing Chunlizhengda Medical Instruments has changed over time.

SEHK:1858 CEO Compensation, July 17th 2019

Is Beijing Chunlizhengda Medical Instruments Co., Ltd. Growing?

Over the last three years Beijing Chunlizhengda Medical Instruments Co., Ltd. has grown its earnings per share (EPS) by an average of 28% per year (using a line of best fit). It achieved revenue growth of 66% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. It could be important to check this free visual depiction of what analysts expect for the future.

Has Beijing Chunlizhengda Medical Instruments Co., Ltd. Been A Good Investment?

Most shareholders would probably be pleased with Beijing Chunlizhengda Medical Instruments Co., Ltd. for providing a total return of 203% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Chunbao Shi is paid around what is normal the leaders of comparable size companies.

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling Beijing Chunlizhengda Medical Instruments shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.