Wei Hou is the CEO of Jiyi Household International Holdings Limited (HKG:1495). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Wei Hou's Compensation Compare With Similar Sized Companies?
Our data indicates that Jiyi Household International Holdings Limited is worth HK$588m, and total annual CEO compensation was reported as CN¥974k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥121k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. 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¥1.5m.
Most shareholders would consider it a positive that Wei Hou 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 Jiyi Household International Holdings, below.
Is Jiyi Household International Holdings Limited Growing?
Over the last three years Jiyi Household International Holdings Limited has shrunk its earnings per share by an average of 52% per year (measured with a line of best fit). Its revenue is up 17% over last year.
Unfortunately, earnings per share have trended lower over the last three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Jiyi Household International Holdings Limited Been A Good Investment?
Since shareholders would have lost about 23% over three years, some Jiyi Household International Holdings Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
It looks like Jiyi Household International Holdings Limited pays its CEO less than similar sized companies.
Shareholders should note that compensation for Wei Hou is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. Whatever your view on compensation, you might want to check if insiders are buying or selling Jiyi Household International Holdings shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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