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How Should Investors React To China Greenland Broad Greenstate Group Company Limited's (HKG:1253) CEO Pay?

Simply Wall St

The CEO of China Greenland Broad Greenstate Group Company Limited (HKG:1253) is Zhengping Wu. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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.

Check out our latest analysis for China Greenland Broad Greenstate Group

How Does Zhengping Wu's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that China Greenland Broad Greenstate Group Company Limited has a market cap of HK$1.5b, and reported total annual CEO compensation of CN¥1.1m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CN¥960k. We looked at a group of companies with market capitalizations from CN¥712m to CN¥2.8b, and the median CEO total compensation was CN¥2.0m.

Most shareholders would consider it a positive that Zhengping Wu takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.

You can see a visual representation of the CEO compensation at China Greenland Broad Greenstate Group, below.

SEHK:1253 CEO Compensation, September 30th 2019

Is China Greenland Broad Greenstate Group Company Limited Growing?

On average over the last three years, China Greenland Broad Greenstate Group Company Limited has shrunk earnings per share by 34% each year (measured with a line of best fit). In the last year, its revenue is down 48%.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Greenland Broad Greenstate Group Company Limited Been A Good Investment?

Given the total loss of 67% over three years, many shareholders in China Greenland Broad Greenstate Group Company Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

China Greenland Broad Greenstate Group Company Limited is currently paying its CEO below what is normal for companies of its size.

The compensation paid to Zhengping Wu is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling China Greenland Broad Greenstate Group (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.