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Does Guangdong Adway Construction (Group) Holdings Company Limited's (HKG:6189) CEO Pay Reflect Performance?

Simply Wall St

In 2012 Yujing Ye was appointed CEO of Guangdong Adway Construction (Group) Holdings Company Limited (HKG:6189). 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.

View our latest analysis for Guangdong Adway Construction (Group) Holdings

How Does Yujing Ye's Compensation Compare With Similar Sized Companies?

Our data indicates that Guangdong Adway Construction (Group) Holdings Company Limited is worth HK$6.7b, and total annual CEO compensation was reported as CN¥712k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CN¥672k. We looked at a group of companies with market capitalizations from CN¥2.8b to CN¥11b, and the median CEO total compensation was CN¥3.3m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see a visual representation of the CEO compensation at Guangdong Adway Construction (Group) Holdings, below.

SEHK:6189 CEO Compensation, December 11th 2019

Is Guangdong Adway Construction (Group) Holdings Company Limited Growing?

Over the last three years Guangdong Adway Construction (Group) Holdings Company Limited has shrunk its earnings per share by an average of 2.7% per year (measured with a line of best fit). In the last year, its revenue is up 11%.

The lack of earnings per share growth in the last three years is unimpressive. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Guangdong Adway Construction (Group) Holdings Company Limited Been A Good Investment?

Boasting a total shareholder return of 460% over three years, Guangdong Adway Construction (Group) Holdings Company Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

It appears that Guangdong Adway Construction (Group) Holdings Company Limited remunerates its CEO below most similar sized companies.

It's well worth noting that while Yujing Ye 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. Although we could see higher EPS growth, we'd argue the remuneration is not an issue, based on these observations. Whatever your view on compensation, you might want to check if insiders are buying or selling Guangdong Adway Construction (Group) Holdings shares (free trial).

Important note: Guangdong Adway Construction (Group) Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.

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