Wukui Bai has been the CEO of Chen Xing Development Holdings Limited (HKG:2286) since 2004. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 Wukui Bai's Compensation Compare With Similar Sized Companies?
Our data indicates that Chen Xing Development Holdings Limited is worth HK$1.2b, and total annual CEO compensation is CN¥650k. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥507k. We took a group of companies with market capitalizations below CN¥1.4b, and calculated the median CEO total compensation to be CN¥1.6m.
Most shareholders would consider it a positive that Wukui Bai 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 Chen Xing Development Holdings, below.
Is Chen Xing Development Holdings Limited Growing?
Chen Xing Development Holdings Limited has reduced its earnings per share by an average of 19% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 2.3%.
Unfortunately, earnings per share have trended lower over the last three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Chen Xing Development Holdings Limited Been A Good Investment?
I think that the total shareholder return of 40%, over three years, would leave most Chen Xing Development Holdings Limited shareholders smiling. 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.
It appears that Chen Xing Development Holdings Limited remunerates its CEO below most similar sized companies.
Wukui Bai receives relatively low remuneration compared to similar sized companies. And while the company isn't growing earnings per share, total returns have been pleasing. We would like to see EPS growth, but in our view it seems the CEO is remunerated reasonably. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Chen Xing Development Holdings (free visualization of insider trades).
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.
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