Andy Zheng has been the CEO of Huaxi Holdings Company Limited (HKG:1689) since 2013. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Andy Zheng's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Huaxi Holdings Company Limited has a market cap of HK$1.4b, and is paying total annual CEO compensation of HK$866k. (This figure is for the year to March 2019). Notably, that's an increase of 38% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at HK$104k. When we examined a selection of companies with market caps ranging from HK$782m to HK$3.1b, we found the median CEO total compensation was HK$2.3m.
Most shareholders would consider it a positive that Andy Zheng takes less total compensation than the CEOs of most similar size companies, leaving more 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 Huaxi Holdings has changed over time.
Is Huaxi Holdings Company Limited Growing?
Huaxi Holdings Company Limited saw earnings per share stay pretty flat over the last three years, albeit with a slight decrease, according to the line of best fit. It achieved revenue growth of 25% over the last year.
The reduction in earnings per share, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Huaxi Holdings Company Limited Been A Good Investment?
I think that the total shareholder return of 49%, over three years, would leave most Huaxi Holdings Company Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Huaxi Holdings Company Limited is currently paying its CEO below what is normal for companies of its size.
It's well worth noting that while Andy Zheng is paid below what is normal at companies of similar size, the returns have been very pleasing, over the last three years. So, while it might be nice to have better EPS growth, on our analysis the CEO compensation is quite modest. Shareholders may want to check for free if Huaxi Holdings insiders are buying or selling shares.
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 email@example.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.