How Should Investors Feel About China XD Plastics Company Limited's (NASDAQ:CXDC) CEO Pay?
Jie Han became the CEO of China XD Plastics Company Limited (NASDAQ:CXDC) in 2008. First, this article will compare CEO compensation with compensation at similar sized companies. 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 method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for China XD Plastics
How Does Jie Han's Compensation Compare With Similar Sized Companies?
Our data indicates that China XD Plastics Company Limited is worth US$107m, and total annual CEO compensation is US$544k. (This is based on the year to December 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$544k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$495k.
That means Jie Han receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at China XD Plastics has changed from year to year.
Is China XD Plastics Company Limited Growing?
On average over the last three years, China XD Plastics Company Limited has shrunk earnings per share by 22% each year (measured with a line of best fit). Its revenue is up 3.3% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has China XD Plastics Company Limited Been A Good Investment?
With a three year total loss of 59%, China XD Plastics Company Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Jie Han is paid around the same as most CEOs of similar size companies.
The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. Shareholders may want to check for free if China XD Plastics insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
