Li Zhang became the CEO of Guangzhou R&F Properties Co., Ltd. (HKG:2777) in 2005. 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 - 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.
How Does Li Zhang's Compensation Compare With Similar Sized Companies?
According to our data, Guangzhou R&F Properties Co., Ltd. has a market capitalization of HK$45b, and paid its CEO total annual compensation worth CN¥5.3m over the year to December 2018. Notably, the salary of CN¥5.3m is the vast majority of the CEO compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CN¥28b to CN¥83b. The median total CEO compensation was CN¥4.0m.
It would therefore appear that Guangzhou R&F Properties Co., Ltd. pays Li Zhang more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Guangzhou R&F Properties has changed over time.
Is Guangzhou R&F Properties Co., Ltd. Growing?
Guangzhou R&F Properties Co., Ltd. has increased its earnings per share (EPS) by an average of 17% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 6.7%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has Guangzhou R&F Properties Co., Ltd. Been A Good Investment?
I think that the total shareholder return of 69%, over three years, would leave most Guangzhou R&F Properties Co., Ltd. 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.
We examined the amount Guangzhou R&F Properties Co., Ltd. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying Guangzhou R&F Properties shares with their own money (free access).
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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