U.S. Markets open in 2 hrs 40 mins

Is Fufeng Group Limited (HKG:546) Overpaying Its CEO?

Simply Wall St

In 2016 Qiang Zhao was appointed CEO of Fufeng Group Limited (HKG:546). First, this article will compare CEO compensation with compensation at similar sized companies. 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. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Fufeng Group

How Does Qiang Zhao's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Fufeng Group Limited has a market cap of HK$9.8b, and is paying total annual CEO compensation of CN¥6.1m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at CN¥4.5m. We looked at a group of companies with market capitalizations from CN¥7.1b to CN¥23b, and the median CEO total compensation was CN¥4.1m.

As you can see, Qiang Zhao is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Fufeng Group Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Fufeng Group has changed over time.

SEHK:546 CEO Compensation, September 5th 2019

Is Fufeng Group Limited Growing?

On average over the last three years, Fufeng Group Limited has grown earnings per share (EPS) by 24% each year (using a line of best fit). It achieved revenue growth of 11% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.

Has Fufeng Group Limited Been A Good Investment?

Fufeng Group Limited has generated a total shareholder return of 24% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

We compared total CEO remuneration at Fufeng Group Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. So you may want to check if insiders are buying Fufeng Group shares with their own money (free access).

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

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 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. Thank you for reading.