In 2005 Zhilin Li was appointed CEO of China Pharma Holdings, Inc. (NYSEMKT:CPHI). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Zhilin Li's Compensation Compare With Similar Sized Companies?
According to our data, China Pharma Holdings, Inc. has a market capitalization of US$12m, and pays its CEO total annual compensation worth US$242k. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$226k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$498k.
A first glance this seems like a real positive for shareholders, since Zhilin Li is paid less than the average total compensation paid by similar sized companies. 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 Pharma Holdings, below.
Is China Pharma Holdings, Inc. Growing?
Over the last three years China Pharma Holdings, Inc. has shrunk its earnings per share by an average of 13% per year (measured with a line of best fit). Its revenue is down -20% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, 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 Pharma Holdings, Inc. Been A Good Investment?
China Pharma Holdings, Inc. has served shareholders reasonably well, with a total return of 14% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
China Pharma Holdings, Inc. is currently paying its CEO below what is normal for companies of its size.
The compensation paid to Zhilin Li is lower than is usual at similar sized companies. But the business isn't growing earnings per share, and the returns to shareholders haven't been wonderful. We would like to see EPS growth from the business, although we wouldn't say the CEO pay is high. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling China Pharma Holdings (free visualization of insider trades).
If you want to buy a stock that is better than China Pharma Holdings, this free list of high return, low debt companies is a great place to look.
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