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Does Smart-Core Holdings Limited's (HKG:2166) CEO Pay Compare Well With Peers?

Weidong Tian is the CEO of Smart-Core Holdings Limited (HKG:2166). First, this article will compare CEO compensation with compensation at similar sized 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.

Check out our latest analysis for Smart-Core Holdings

How Does Weidong Tian's Compensation Compare With Similar Sized Companies?

According to our data, Smart-Core Holdings Limited has a market capitalization of HK$661m, and paid its CEO total annual compensation worth HK$1.4m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$1.1m. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO total compensation in that group is HK$1.8m.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Smart-Core Holdings stands. Speaking on an industry level, we can see that nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. So it seems like there isn't a significant difference between Smart-Core Holdings and the broader market, in terms of salary allocation in the overall compensation package.

So Weidong Tian receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. You can see a visual representation of the CEO compensation at Smart-Core Holdings, below.

SEHK:2166 CEO Compensation April 2nd 2020
SEHK:2166 CEO Compensation April 2nd 2020

Is Smart-Core Holdings Limited Growing?

Smart-Core Holdings Limited has reduced its earnings per share by an average of 11% a year, over the last three years (measured with a line of best fit). Its revenue is down 3.5% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Smart-Core Holdings Limited Been A Good Investment?

With a three year total loss of 25%, Smart-Core Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Weidong Tian is paid around what is normal for the leaders of comparable size companies.

After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Few would argue that it's wise for the company to pay any more, before returns improve. Taking a breather from CEO compensation, we've spotted 3 warning signs for Smart-Core Holdings (of which 1 is significant!) you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.

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