In 2016 Jichun Hu was appointed CEO of China High Speed Transmission Equipment Group Co., Ltd. (HKG:658). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.
How Does Jichun Hu's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that China High Speed Transmission Equipment Group Co., Ltd. has a market cap of HK$6.4b, and reported total annual CEO compensation of CN¥2.5m for the year to December 2018. Notably, the salary of CN¥2.4m is the vast majority of the CEO compensation. We examined companies with market caps from CN¥2.8b to CN¥11b, and discovered that the median CEO total compensation of that group was CN¥3.4m.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where China High Speed Transmission Equipment Group stands. On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. China High Speed Transmission Equipment Group pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay.
That means Jichun Hu receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. You can see, below, how CEO compensation at China High Speed Transmission Equipment Group has changed over time.
Is China High Speed Transmission Equipment Group Co., Ltd. Growing?
Over the last three years China High Speed Transmission Equipment Group Co., Ltd. has shrunk its earnings per share by an average of 42% per year (measured with a line of best fit). It achieved revenue growth of 20% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has China High Speed Transmission Equipment Group Co., Ltd. Been A Good Investment?
Given the total loss of 53% over three years, many shareholders in China High Speed Transmission Equipment Group Co., Ltd. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Remuneration for Jichun Hu is close enough to the median pay for a CEO of a similar sized company .
The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. Shifting gears from CEO pay for a second, we've spotted 4 warning signs for China High Speed Transmission Equipment Group you should be aware of, and 1 of them shouldn't be ignored.
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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