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Shu Gu is the CEO of Industrial and Commercial Bank of China Limited (HKG:1398). First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Shu Gu's Compensation Compare With Similar Sized Companies?
Our data indicates that Industrial and Commercial Bank of China Limited is worth HK$2.2t, and total annual CEO compensation is CN¥634k. (This number is for the twelve months until December 2017). We think total compensation is more important but we note that the CEO salary is lower, at CN¥519k. When we examined a group of companies with market caps over CN¥54b, we found that their median CEO total compensation was CN¥3.2m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Industrial and Commercial Bank of China has changed over time.
Is Industrial and Commercial Bank of China Limited Growing?
On average over the last three years, Industrial and Commercial Bank of China Limited has grown earnings per share (EPS) by 2.2% each year (using a line of best fit). Its revenue is up 2.2% over last year.
I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. Considering these factors I'd say performance has been pretty decent, though not amazing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Industrial and Commercial Bank of China Limited Been A Good Investment?
Boasting a total shareholder return of 61% over three years, Industrial and Commercial Bank of China Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Industrial and Commercial Bank of China Limited is currently paying its CEO below what is normal for large companies.
Shu Gu is paid less than what is normal at large companies, and the total shareholder return has been pleasing over the last three years. We would like to see EPS growth, but in our view it seems the CEO is modestly remunerated. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Industrial and Commercial Bank of China (free visualization of insider trades).
If you want to buy a stock that is better than Industrial and Commercial Bank of China, this free list of high return, low debt companies is a great place to look.
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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.