Daxiong Wang has been the CEO of COSCO SHIPPING Development Co., Ltd. (HKG:2866) 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 - 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 Daxiong Wang's Compensation Compare With Similar Sized Companies?
According to our data, COSCO SHIPPING Development Co., Ltd. has a market capitalization of HK$26b, and paid its CEO total annual compensation worth CN¥2.6m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥1.3m. We looked at a group of companies with market capitalizations from CN¥14b to CN¥44b, and the median CEO total compensation was CN¥3.9m.
A first glance this seems like a real positive for shareholders, since Daxiong Wang is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at COSCO SHIPPING Development has changed from year to year.
Is COSCO SHIPPING Development Co., Ltd. Growing?
COSCO SHIPPING Development Co., Ltd. has increased its earnings per share (EPS) by an average of 27% a year, over the last three years (using a line of best fit). It saw its revenue drop 24% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has COSCO SHIPPING Development Co., Ltd. Been A Good Investment?
With a three year total loss of 41%, COSCO SHIPPING Development Co., Ltd. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
COSCO SHIPPING Development Co., Ltd. is currently paying its CEO below what is normal for companies of its size.
Considering the underlying business is growing earnings, this would suggest the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. We're not critical of the remuneration Daxiong Wang receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. So you may want to check if insiders are buying COSCO SHIPPING Development shares with their own money (free access).
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.
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