The CEO of China Jicheng Holdings Limited (HKG:1027) is Wenji Huang. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 Wenji Huang's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that China Jicheng Holdings Limited has a market cap of HK$102m, and reported total annual CEO compensation of CN¥504k for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth CN¥500k. We examined a group of similar sized companies, with market capitalizations of below CN¥1.4b. The median CEO total compensation in that group is CN¥1.6m.
Most shareholders would consider it a positive that Wenji Huang takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at China Jicheng Holdings, below.
Is China Jicheng Holdings Limited Growing?
Over the last three years China Jicheng Holdings Limited has shrunk its earnings per share by an average of 26% per year (measured with a line of best fit). In the last year, its revenue is up 14%.
Unfortunately, earnings per share have trended lower over the last three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 China Jicheng Holdings Limited Been A Good Investment?
With a three year total loss of 99%, China Jicheng Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
It looks like China Jicheng Holdings Limited pays its CEO less than similar sized companies.
Wenji Huang is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. 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 an important area to keep your eyes on, but we've also identified 4 warning signs for China Jicheng Holdings (2 are potentially serious!) that you should be aware of before investing here.
If you want to buy a stock that is better than China Jicheng Holdings, this free list of high return, low debt companies is a great place to look.
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