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Is CPMC Holdings Limited (HKG:906) Overpaying Its CEO?

Simply Wall St

Ye Zhang has been the CEO of CPMC Holdings Limited (HKG:906) since 2016. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for CPMC Holdings

How Does Ye Zhang's Compensation Compare With Similar Sized Companies?

Our data indicates that CPMC Holdings Limited is worth HK$3.7b, and total annual CEO compensation was reported as CN¥1.2m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥663k. We examined companies with market caps from CN¥1.4b to CN¥5.5b, and discovered that the median CEO total compensation of that group was CN¥2.4m.

Most shareholders would consider it a positive that Ye Zhang takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see, below, how CEO compensation at CPMC Holdings has changed over time.

SEHK:906 CEO Compensation, January 23rd 2020

Is CPMC Holdings Limited Growing?

Over the last three years CPMC Holdings Limited has shrunk its earnings per share by an average of 5.3% per year (measured with a line of best fit). It achieved revenue growth of 7.4% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.

Has CPMC Holdings Limited Been A Good Investment?

With a three year total loss of 2.0%, CPMC Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

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

Shareholders should note that compensation for Ye Zhang is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. Shareholders may want to check for free if CPMC Holdings insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.