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Does Yuexiu Transport Infrastructure Limited's (HKG:1052) CEO Pay Reflect Performance?

Simply Wall St

Baiqing He is the CEO of Yuexiu Transport Infrastructure Limited (HKG:1052). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Yuexiu Transport Infrastructure

How Does Baiqing He's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Yuexiu Transport Infrastructure Limited has a market cap of HK$11b, and reported total annual CEO compensation of CN¥2.7m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥536k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from CN¥7.0b to CN¥22b, and the median CEO total compensation was CN¥3.9m.

Most shareholders would consider it a positive that Baiqing He 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 Yuexiu Transport Infrastructure, below.

SEHK:1052 CEO Compensation, February 12th 2020

Is Yuexiu Transport Infrastructure Limited Growing?

Yuexiu Transport Infrastructure Limited has increased its earnings per share (EPS) by an average of 16% a year, over the last three years (using a line of best fit). In the last year, its revenue changed by just 0.3%.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Yuexiu Transport Infrastructure Limited Been A Good Investment?

Boasting a total shareholder return of 52% over three years, Yuexiu Transport Infrastructure Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

It appears that Yuexiu Transport Infrastructure Limited remunerates its CEO below most similar sized companies.

Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Baiqing He deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Yuexiu Transport Infrastructure shares (free trial).

If you want to buy a stock that is better than Yuexiu Transport Infrastructure, this free list of high return, low debt companies is a great place to look.

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.