Steven Xiang became the CEO of Huanxi Media Group Limited (HKG:1003) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. 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 Steven Xiang's Compensation Compare With Similar Sized Companies?
Our data indicates that Huanxi Media Group Limited is worth HK$4.6b, and total annual CEO compensation was reported as HK$41m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at HK$12m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from HK$1.6b to HK$6.2b, and discovered that the median CEO total compensation of that group was HK$2.6m.
Thus we can conclude that Steven Xiang receives more in total compensation than the median of a group of companies in the same market, and of similar size to Huanxi Media Group Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Huanxi Media Group has changed from year to year.
Is Huanxi Media Group Limited Growing?
Huanxi Media Group Limited has increased its earnings per share (EPS) by an average of 71% a year, over the last three years (using a line of best fit). It achieved revenue growth of 739% over the last year.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Huanxi Media Group Limited Been A Good Investment?
Given the total loss of 42% over three years, many shareholders in Huanxi Media Group Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount Huanxi Media Group Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. Shareholders may want to check for free if Huanxi Media Group 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.
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