The CEO of Da Sen Holdings Group Limited (HKG:1580) is Songmao Wang. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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 Songmao Wang's Compensation Compare With Similar Sized Companies?
Our data indicates that Da Sen Holdings Group Limited is worth HK$400m, and total annual CEO compensation was reported as CN¥751k for the year to December 2019. Notably, that's an increase of 10% over the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥577k. We looked at a group of companies with market capitalizations under CN¥1.4b, and the median CEO total compensation was CN¥1.6m.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Da Sen Holdings Group stands. Talking in terms of the sector, salary represented approximately 77% of total compensation out of all the companies we analysed, while other remuneration made up 23% of the pie. So it seems like there isn't a significant difference between Da Sen Holdings Group and the broader market, in terms of salary allocation in the overall compensation package.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion. You can see a visual representation of the CEO compensation at Da Sen Holdings Group, below.
Is Da Sen Holdings Group Limited Growing?
Over the last three years Da Sen Holdings Group Limited has shrunk its earnings per share by an average of 93% per year (measured with a line of best fit). In the last year, its revenue is down 27%.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Da Sen Holdings Group Limited Been A Good Investment?
Given the total loss of 74% over three years, many shareholders in Da Sen Holdings Group Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
It looks like Da Sen Holdings Group Limited pays its CEO less than similar sized companies.
Shareholders should note that compensation for Songmao Wang is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. This contrasts with the growth in CEO remuneration, albeit off a reasonably low base. While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. Taking a breather from CEO compensation, we've spotted 4 warning signs for Da Sen Holdings Group (of which 1 makes us a bit uncomfortable!) you should know about in order to have a holistic understanding of the stock.
If you want to buy a stock that is better than Da Sen Holdings Group, this free list of high return, low debt companies is a great place to look.
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