In 2008 Yaoneng Lyu was appointed CEO of Jujiang Construction Group Co., Ltd. (HKG:1459). 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Yaoneng Lyu's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Jujiang Construction Group Co., Ltd. has a market cap of HK$533m, and reported total annual CEO compensation of CN¥438k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥308k. 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¥1.5m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Jujiang Construction Group has changed over time.
Is Jujiang Construction Group Co., Ltd. Growing?
Over the last three years Jujiang Construction Group Co., Ltd. has grown its earnings per share (EPS) by an average of 21% per year (using a line of best fit). It achieved revenue growth of 19% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Jujiang Construction Group Co., Ltd. Been A Good Investment?
Given the total loss of 30% over three years, many shareholders in Jujiang Construction Group Co., Ltd. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
It appears that Jujiang Construction Group Co., Ltd. remunerates its CEO below most similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we would not say that Yaoneng Lyu is generously paid, it would be good to see an improvement in business performance before too an increase in pay. In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. Whatever your view on compensation, you might want to check if insiders are buying or selling Jujiang Construction Group shares (free trial).
Important note: Jujiang Construction Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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