Jun Zhang has been the CEO of Guodian Technology & Environment Group Corporation Limited (HKG:1296) since 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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 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$1.1b, and paid its CEO total annual compensation worth CN¥1.0m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CN¥641k. We examined a group of similar sized companies, with market capitalizations of below CN¥1.4b. The median CEO total compensation in that group is CN¥1.6m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. Guodian Technology & Environment Group does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.
At first glance this seems like a real positive for shareholders, since Jun Zhang is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance. You can see, below, how CEO compensation at Guodian Technology & Environment Group has changed over time.
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 108% per year (measured with a line of best fit). It achieved revenue growth of 2.4% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Guodian Technology & Environment Group Corporation Limited Been A Good Investment?
Given the total loss of 65% over three years, many shareholders in Guodian Technology & Environment Group Corporation Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
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. On another note, Guodian Technology & Environment Group has 3 warning signs (and 2 which are significant) we think you should know about.
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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