Jingtao Bai has been the CEO of China Merchants Port Holdings Company Limited (HKG:144) since 2015. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jingtao Bai's Compensation Compare With Similar Sized Companies?
Our data indicates that China Merchants Port Holdings Company Limited is worth HK$42b, and total annual CEO compensation was reported as HK$2.8m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at HK$1.5m. We looked at a group of companies with market capitalizations from HK$31b to HK$94b, and the median CEO total compensation was HK$4.1m.
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 China Merchants Port Holdings, below.
Is China Merchants Port Holdings Company Limited Growing?
Over the last three years China Merchants Port Holdings Company Limited has grown its earnings per share (EPS) by an average of 17% per year (using a line of best fit). In the last year, its revenue is down 11%.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.
Has China Merchants Port Holdings Company Limited Been A Good Investment?
With a three year total loss of 22%, China Merchants Port Holdings Company Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
China Merchants Port Holdings Company 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. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we don't think, Jingtao Bai is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out. 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling China Merchants Port Holdings (free visualization of insider trades).
Important note: China Merchants Port 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.
If you spot an error that warrants correction, please contact the editor at email@example.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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