Jinzhou He became the CEO of Guangnan (Holdings) Limited (HKG:1203) in 2016. 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 - 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.
How Does Jinzhou He's Compensation Compare With Similar Sized Companies?
According to our data, Guangnan (Holdings) Limited has a market capitalization of HK$672m, and paid its CEO total annual compensation worth HK$720k over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at HK$450k. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO total compensation was HK$1.8m.
A first glance this seems like a real positive for shareholders, since Jinzhou He is paid less than the average total compensation paid by similar sized companies. 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 Guangnan (Holdings), below.
Is Guangnan (Holdings) Limited Growing?
On average over the last three years, Guangnan (Holdings) Limited has grown earnings per share (EPS) by 5.5% each year (using a line of best fit). In the last year, its revenue changed by just 0.2%.
I'd prefer higher revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Guangnan (Holdings) Limited Been A Good Investment?
Since shareholders would have lost about 23% over three years, some Guangnan (Holdings) Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
It looks like Guangnan (Holdings) Limited pays its CEO less than similar sized companies.
Jinzhou He receives relatively low remuneration compared to similar sized companies. But the company isn't exactly firing on all cylinders, and returns over three years are not good. So while shareholders shouldn't be overly concerned about CEO compensation, they would probably like to see improved shareholder returns before seeing a pay increase. Whatever your view on compensation, you might want to check if insiders are buying or selling Guangnan (Holdings) shares (free trial).
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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