Is Beijing Urban Construction Design & Development Group Co., Limited’s (HKG:1599) CEO Being Overpaid?
Hanjun Wang has been the CEO of Beijing Urban Construction Design & Development Group Co., Limited (HKG:1599) since 2011. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Beijing Urban Construction Design & Development Group
How Does Hanjun Wang’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Beijing Urban Construction Design & Development Group Co., Limited has a market cap of HK$4.2b, and is paying total annual CEO compensation of CN¥1.1m. (This number is for the twelve months until 2017). While we always look at total compensation first, we note that the salary component is less, at CN¥255k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CN¥1.4b to CN¥5.4b. The median total CEO compensation was CN¥2.1m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at Beijing Urban Construction Design & Development Group, below.
Is Beijing Urban Construction Design & Development Group Co., Limited Growing?
On average over the last three years, Beijing Urban Construction Design & Development Group Co., Limited has grown earnings per share (EPS) by 13% each year (using a line of best fit). Its revenue is up 20% over last year.
This demonstrates that the company has been improving recently. A good result. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Beijing Urban Construction Design & Development Group Co., Limited Been A Good Investment?
With a three year total loss of 13%, Beijing Urban Construction Design & Development Group Co., Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
Beijing Urban Construction Design & Development Group Co., Limited is currently paying its CEO below what is normal for companies of its size. Considering the underlying business is growing earnings, this would suggest the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. We’re not critical of the remuneration Hanjun Wang receives, but it would be good to see improved returns to shareholders before the remuneration grows too much.
When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. Shareholders may want to check for free if Beijing Urban Construction Design & Development Group insiders are buying or selling shares.
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.
