U.S. Markets closed

Is Guodian Technology Environment Group Corporation Limited's (HKG:1296) CEO Pay Fair?

Simply Wall St

Jun Zhang became the CEO of Guodian Technology & Environment Group Corporation Limited (HKG:1296) in 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Guodian Technology & Environment Group

How Does Jun Zhang's Compensation Compare With Similar Sized Companies?

According to our data, Guodian Technology & Environment Group Corporation Limited has a market capitalization of HK$1.6b, and paid its CEO total annual compensation worth CN¥1.0m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥641k. We looked at a group of companies with market capitalizations from CN¥707m to CN¥2.8b, and the median CEO total compensation was CN¥2.0m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.

The graphic below shows how CEO compensation at Guodian Technology & Environment Group has changed from year to year.

SEHK:1296 CEO Compensation, October 30th 2019

Is Guodian Technology & Environment Group Corporation Limited Growing?

Over the last three years Guodian Technology & Environment Group Corporation Limited has shrunk its earnings per share by an average of 66% per year (measured with a line of best fit). Its revenue is down 4.1% 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Guodian Technology & Environment Group Corporation Limited Been A Good Investment?

Given the total loss of 55% over three years, many shareholders in Guodian Technology & Environment Group Corporation Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

It appears that Guodian Technology & Environment Group Corporation Limited remunerates its CEO below most similar sized companies.

Shareholders should note that compensation for Jun Zhang is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Guodian Technology & Environment Group (free visualization of insider trades).

If you want to buy a stock that is better than Guodian Technology & Environment Group, this free list of high return, low debt companies is a great place to look.

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.