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Is Chen Xing Development Holdings Limited's (HKG:2286) CEO Paid Enough Relative To Peers?

Simply Wall St

Wukui Bai became the CEO of Chen Xing Development Holdings Limited (HKG:2286) in 2004. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Chen Xing Development Holdings

How Does Wukui Bai's Compensation Compare With Similar Sized Companies?

According to our data, Chen Xing Development Holdings Limited has a market capitalization of HK$1.5b, and paid its CEO total annual compensation worth CN¥650k over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CN¥507k. When we examined a selection of companies with market caps ranging from CN¥694m to CN¥2.8b, we found the median CEO total compensation was CN¥2.0m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see, below, how CEO compensation at Chen Xing Development Holdings has changed over time.

SEHK:2286 CEO Compensation, January 29th 2020

Is Chen Xing Development Holdings Limited Growing?

On average over the last three years, Chen Xing Development Holdings Limited has shrunk earnings per share by 19% each year (measured with a line of best fit). It achieved revenue growth of 2.3% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Chen Xing Development Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with Chen Xing Development Holdings Limited for providing a total return of 73% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

It looks like Chen Xing Development Holdings Limited pays its CEO less than similar sized companies.

It's well worth noting that while Wukui Bai is paid less than most company leaders (at similar sized companies), there isn't much EPS growth. Having said that, returns to shareholders have been great. We would like to see EPS growth, but in our view it seems the CEO is remunerated reasonably. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Chen Xing Development Holdings.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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. Thank you for reading.