Dong Cai became the CEO of Sinotruk (Hong Kong) Limited (HKG:3808) in 2007. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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 Dong Cai's Compensation Compare With Similar Sized Companies?
According to our data, Sinotruk (Hong Kong) Limited has a market capitalization of HK$43b, and paid its CEO total annual compensation worth CN¥781k over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥660k. We looked at a group of companies with market capitalizations from CN¥28b to CN¥83b, and the median CEO total compensation was CN¥4.0m.
Most shareholders would consider it a positive that Dong Cai 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.
You can see a visual representation of the CEO compensation at Sinotruk (Hong Kong), below.
Is Sinotruk (Hong Kong) Limited Growing?
Sinotruk (Hong Kong) Limited has increased its earnings per share (EPS) by an average of 63% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 1.7%.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. Shareholders might be interested in this free visualization of analyst forecasts.
Has Sinotruk (Hong Kong) Limited Been A Good Investment?
I think that the total shareholder return of 202%, over three years, would leave most Sinotruk (Hong Kong) Limited shareholders smiling. 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.
Sinotruk (Hong Kong) Limited is currently paying its CEO below what is normal for companies of its size.
Many would consider this to indicate that the pay is modest since the business is growing. The pleasing shareholder returns are the cherry on top; you might even consider that Dong Cai deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Sinotruk (Hong Kong) (free visualization of insider trades).
Important note: Sinotruk (Hong Kong) 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 email@example.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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