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Does China ZhongDi Dairy Holdings Company Limited's (HKG:1492) CEO Pay Reflect Performance?

Simply Wall St

The CEO of China ZhongDi Dairy Holdings Company Limited (HKG:1492) is Jianshe Zhang. 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 method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for China ZhongDi Dairy Holdings

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

According to our data, China ZhongDi Dairy Holdings Company Limited has a market capitalization of HK$772m, and paid its CEO total annual compensation worth CN¥1.9m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CN¥1.7m. We looked at a group of companies with market capitalizations under CN¥1.4b, and the median CEO total compensation was CN¥1.6m.

That means Jianshe Zhang receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at China ZhongDi Dairy Holdings has changed from year to year.

SEHK:1492 CEO Compensation, December 17th 2019

Is China ZhongDi Dairy Holdings Company Limited Growing?

Over the last three years China ZhongDi Dairy Holdings Company Limited has shrunk its earnings per share by an average of 23% per year (measured with a line of best fit). Its revenue is up 19% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has China ZhongDi Dairy Holdings Company Limited Been A Good Investment?

Since shareholders would have lost about 57% over three years, some China ZhongDi Dairy Holdings Company Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Jianshe Zhang is paid around the same as most CEOs of similar size companies.

Returns have been disappointing and the company is not growing its earnings per share. Suffice it to say, we don't think the CEO is underpaid! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at China ZhongDi Dairy Holdings.

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.

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.