Ping Tse became the CEO of Sino Biopharmaceutical Limited (HKG:1177) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ping Tse's Compensation Compare With Similar Sized Companies?
Our data indicates that Sino Biopharmaceutical Limited is worth HK$143b, and total annual CEO compensation was reported as CN¥38m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥12m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a group of companies with market caps over CN¥56b, we found that their median CEO total compensation was CN¥6.9m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
Thus we can conclude that Ping Tse receives more in total compensation than the median of a group of large companies in the same market as Sino Biopharmaceutical Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Sino Biopharmaceutical, below.
Is Sino Biopharmaceutical Limited Growing?
On average over the last three years, Sino Biopharmaceutical Limited has grown earnings per share (EPS) by 62% each year (using a line of best fit). In the last year, its revenue is up 28%.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.
Has Sino Biopharmaceutical Limited Been A Good Investment?
I think that the total shareholder return of 165%, over three years, would leave most Sino Biopharmaceutical Limited shareholders smiling. 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.
We compared total CEO remuneration at Sino Biopharmaceutical Limited with the amount paid at other large companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Shifting gears from CEO pay for a second, we've spotted 2 warning signs for Sino Biopharmaceutical you should be aware of, and 1 of them is a bit concerning.
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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