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How Should Investors React To China Life Insurance Company Limited’s (HKG:2628) CEO Pay?

Dairen Lin became the CEO of China Life Insurance Company Limited (HKG:2628) in 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for China Life Insurance

How Does Dairen Lin’s Compensation Compare With Similar Sized Companies?

Our data indicates that China Life Insurance Company Limited is worth HK$624b, and total annual CEO compensation is CN¥1.6m. That’s below the compensation, last year. We took a group of companies with market capitalizations over CN¥56b, and calculated the median CEO compensation to be CN¥4.6m.

A first glance this seems like a real positive for shareholders, since Dairen Lin is paid less than the average compensation paid by other large companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.

The graphic below shows how CEO compensation at China Life Insurance has changed from year to year.

SEHK:2628 CEO Compensation November 25th 18

Is China Life Insurance Company Limited Growing?

China Life Insurance Company Limited has increased its earnings per share (EPS) by an average of 5.3% a year, over the last three years The trailing twelve months of revenue was pretty much the same as the prior period.

I’m not particularly impressed by the revenue growth, but the modest improvement in EPS is good. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information.

Shareholders might be interested in this free visualization of analyst forecasts. .

Has China Life Insurance Company Limited Been A Good Investment?

With a three year total loss of 36%, China Life Insurance Company Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

It looks like China Life Insurance Company Limited pays its CEO less than the average at large companies.

Dairen Lin receives relatively low remuneration compared to most large companies. But the company isn’t exactly firing on all cylinders, and returns over three years are not good. I am not concerned by the CEO compensation, but it would be good to see improved performance before pay increases.

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.