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Is Consun Pharmaceutical Group Limited's (HKG:1681) CEO Overpaid Relative To Its Peers?

Simply Wall St

Qian Li is the CEO of Consun Pharmaceutical Group Limited (HKG:1681). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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.

Check out our latest analysis for Consun Pharmaceutical Group

How Does Qian Li's Compensation Compare With Similar Sized Companies?

Our data indicates that Consun Pharmaceutical Group Limited is worth HK$3.9b, and total annual CEO compensation was reported as CN¥14m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥975k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CN¥1.4b to CN¥5.6b. The median total CEO compensation was CN¥2.3m.

As you can see, Qian Li is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Consun Pharmaceutical Group Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Consun Pharmaceutical Group has changed over time.

SEHK:1681 CEO Compensation, November 15th 2019

Is Consun Pharmaceutical Group Limited Growing?

On average over the last three years, Consun Pharmaceutical Group Limited has grown earnings per share (EPS) by 24% each year (using a line of best fit). In the last year, its revenue is up 8.9%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has Consun Pharmaceutical Group Limited Been A Good Investment?

Consun Pharmaceutical Group Limited has served shareholders reasonably well, with a total return of 24% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

We compared the total CEO remuneration paid by Consun Pharmaceutical Group Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. We also think investors are doing ok, over the same time period. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we'd recommend further research on management. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Consun Pharmaceutical Group.

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.

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.

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. Thank you for reading.