Lin Zhang has been the CEO of China Nonferrous Mining Corporation Limited (HKG:1258) since 2017. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Lin Zhang's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that China Nonferrous Mining Corporation Limited has a market cap of HK$6.1b, and reported total annual CEO compensation of US$117k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$78k. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$471k.
Most shareholders would consider it a positive that Lin Zhang takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at China Nonferrous Mining, below.
Is China Nonferrous Mining Corporation Limited Growing?
China Nonferrous Mining Corporation Limited has increased its earnings per share (EPS) by an average of 83% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 5.8%.
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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has China Nonferrous Mining Corporation Limited Been A Good Investment?
I think that the total shareholder return of 50%, over three years, would leave most China Nonferrous Mining Corporation Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
China Nonferrous Mining Corporation 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. The strong history of shareholder returns might even have some thinking that Lin Zhang deserves a raise! It is relatively rare to see a modestly paid CEO when performance is so impressive. The cherry on top would be if company insiders are buying shares with their own money. So you may want to check if insiders are buying China Nonferrous Mining shares with their own money (free access).
Important note: China Nonferrous Mining 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.
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