Zhen Xu has been the CEO of Anhui Expressway Company Limited (HKG:995) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Zhen Xu's Compensation Compare With Similar Sized Companies?
Our data indicates that Anhui Expressway Company Limited is worth HK$10.0b, and total annual CEO compensation was reported as CN¥564k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥515k. When we examined a selection of companies with market caps ranging from CN¥7.0b to CN¥22b, we found the median CEO total compensation was CN¥4.0m.
Most shareholders would consider it a positive that Zhen Xu 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.
The graphic below shows how CEO compensation at Anhui Expressway has changed from year to year.
Is Anhui Expressway Company Limited Growing?
Over the last three years Anhui Expressway Company Limited has grown its earnings per share (EPS) by an average of 6.8% per year (using a line of best fit). In the last year, its revenue changed by just 0.5%.
I would prefer it if there was revenue growth, but it is good to see EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has Anhui Expressway Company Limited Been A Good Investment?
Since shareholders would have lost about 13% over three years, some Anhui Expressway Company Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
Anhui Expressway Company Limited is currently paying its CEO below what is normal for companies of its size.
It's well worth noting that while Zhen Xu is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. I am not concerned by the CEO compensation, but it would be good to see improved performance before pay increases. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Anhui Expressway (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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