Is Guangdong Tannery Limited’s (HKG:1058) CEO Salary Justified?
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Jun Sun has been the CEO of Guangdong Tannery Limited (HKG:1058) since 2010. 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 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.
See our latest analysis for Guangdong Tannery
How Does Jun Sun’s Compensation Compare With Similar Sized Companies?
Our data indicates that Guangdong Tannery Limited is worth HK$269m, and total annual CEO compensation is HK$757k. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at HK$604k. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO compensation in that group is HK$1.7m.
Most shareholders would consider it a positive that Jun Sun takes less 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 Guangdong Tannery, below.
Is Guangdong Tannery Limited Growing?
Guangdong Tannery Limited has reduced its earnings per share by an average of 53% a year, over the last three years (measured with a line of best fit). Its revenue is down -28% over last year.
Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Guangdong Tannery Limited Been A Good Investment?
Given the total loss of 18% over three years, many shareholders in Guangdong Tannery Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
It looks like Guangdong Tannery Limited pays its CEO less than similar sized companies.
Jun Sun is paid less than CEOs of similar size companies, but the company isn’t growing and total shareholder returns have been disappointing. Considering all these factors, we’d stop short of saying the CEO pay is too high, but we don’t think shareholders would want to see a pay rise before business performance improves. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Guangdong Tannery.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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.
