Hongliang Ruan has been the CEO of Flat Glass Group Co., Ltd. (HKG:6865) since 2005. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Hongliang Ruan's Compensation Compare With Similar Sized Companies?
Our data indicates that Flat Glass Group Co., Ltd. is worth HK$17b, and total annual CEO compensation is CN¥860k. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥713k. We looked at a group of companies with market capitalizations from CN¥6.9b to CN¥22b, and the median CEO total compensation was CN¥3.4m.
Most shareholders would consider it a positive that Hongliang Ruan 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 Flat Glass Group has changed from year to year.
Is Flat Glass Group Co., Ltd. Growing?
Flat Glass Group Co., Ltd. has reduced its earnings per share by an average of 16% a year, over the last three years (measured with a line of best fit). Its revenue is up 12% over last year.
Sadly for shareholders, earnings per share are actually down, 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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Flat Glass Group Co., Ltd. Been A Good Investment?
Boasting a total shareholder return of 235% over three years, Flat Glass Group Co., Ltd. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Flat Glass Group Co., Ltd. is currently paying its CEO below what is normal for companies of its size.
It's well worth noting that while Hongliang Ruan is paid less than most company leaders (at similar sized companies), there isn't much EPS growth. Having said that, returns to shareholders have been great. We would like to see EPS growth, but in our view it seems the CEO is remunerated reasonably. Whatever your view on compensation, you might want to check if insiders are buying or selling Flat Glass Group shares (free trial).
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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