Jun Zhou has been the CEO of Shanghai Industrial Holdings Limited (HKG:363) since 2016. 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 - 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 Jun Zhou's Compensation Compare With Similar Sized Companies?
According to our data, Shanghai Industrial Holdings Limited has a market capitalization of HK$16b, and paid its CEO total annual compensation worth HK$5.0m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at HK$2.4m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$7.8b to HK$25b. The median total CEO compensation was HK$3.8m.
It would therefore appear that Shanghai Industrial Holdings Limited pays Jun Zhou more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Shanghai Industrial Holdings has changed from year to year.
Is Shanghai Industrial Holdings Limited Growing?
Over the last three years Shanghai Industrial Holdings Limited has grown its earnings per share (EPS) by an average of 5.6% per year (using a line of best fit). Its revenue is down 3.0% over last year.
I would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. You might want to check this free visual report on analyst forecasts for future earnings.
Has Shanghai Industrial Holdings Limited Been A Good Investment?
With a three year total loss of 22%, Shanghai Industrial Holdings Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at Shanghai Industrial Holdings Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Shanghai Industrial Holdings.
If you want to buy a stock that is better than Shanghai Industrial Holdings, this free list of high return, low debt companies is a great place to look.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.