Yongxiang Zhu is the CEO of Texhong Textile Group Limited (HKG:2678). 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Yongxiang Zhu's Compensation Compare With Similar Sized Companies?
Our data indicates that Texhong Textile Group Limited is worth HK$7.5b, and total annual CEO compensation was reported as CN¥5.5m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥1.0m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from CN¥2.8b to CN¥11b, we found the median CEO total compensation was CN¥3.3m.
Thus we can conclude that Yongxiang Zhu receives more in total compensation than the median of a group of companies in the same market, and of similar size to Texhong Textile Group Limited. However, this doesn't necessarily mean the pay is too high. 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 Texhong Textile Group has changed over time.
Is Texhong Textile Group Limited Growing?
Texhong Textile Group Limited has increased its earnings per share (EPS) by an average of 1.2% a year, over the last three years (using a line of best fit). Its revenue is up 16% over last year.
I think the revenue growth is good. And the improvement in earnings per share is modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. It could be important to check this free visual depiction of what analysts expect for the future.
Has Texhong Textile Group Limited Been A Good Investment?
Since shareholders would have lost about 11% over three years, some Texhong Textile Group Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount Texhong Textile Group Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. So you may want to check if insiders are buying Texhong Textile Group shares with their own money (free access).
Important note: Texhong Textile Group 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.