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Is China Starch Holdings Limited's (HKG:3838) CEO Paid Enough Relative To Peers?

Simply Wall St

The CEO of China Starch Holdings Limited (HKG:3838) is Shijun Gao. First, this article will compare CEO compensation with compensation at similar sized companies. 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. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for China Starch Holdings

How Does Shijun Gao's Compensation Compare With Similar Sized Companies?

According to our data, China Starch Holdings Limited has a market capitalization of HK$875m, and paid its CEO total annual compensation worth CN¥528k over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥450k. We took a group of companies with market capitalizations below CN¥1.4b, and calculated the median CEO total compensation to be CN¥1.6m.

Most shareholders would consider it a positive that Shijun Gao 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 Starch Holdings, below.

SEHK:3838 CEO Compensation, January 4th 2020

Is China Starch Holdings Limited Growing?

On average over the last three years, China Starch Holdings Limited has grown earnings per share (EPS) by 3.1% each year (using a line of best fit). In the last year, its revenue is up 15%.

This revenue growth could really point to a brighter future. And, while modest, the earnings per share growth is noticeable. So while performance isn't amazing, we think it really does seem quite respectable. 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 Starch Holdings Limited Been A Good Investment?

With a three year total loss of 0.7%, China Starch Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

It looks like China Starch Holdings Limited pays its CEO less than similar sized companies.

It's well worth noting that while Shijun Gao is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. Many shareholders would probably like to see improvements, but our analysis does not suggest that CEO compensation is too generous. Shareholders may want to check for free if China Starch Holdings insiders are buying or selling shares.

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.