Is RENHENG Enterprise Holdings Limited's (HKG:3628) CEO Paid Enough Relative To Peers?
Li Liu became the CEO of RENHENG Enterprise Holdings Limited (HKG:3628) in 2016. 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. 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.
Check out our latest analysis for RENHENG Enterprise Holdings
How Does Li Liu's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that RENHENG Enterprise Holdings Limited has a market cap of HK$183m, and reported total annual CEO compensation of HK$1.2m for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth HK$1.2m. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.7m.
So Li Liu receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at RENHENG Enterprise Holdings has changed over time.
Is RENHENG Enterprise Holdings Limited Growing?
On average over the last three years, RENHENG Enterprise Holdings Limited has grown earnings per share (EPS) by 101% each year (using a line of best fit). Its revenue is down 10.0% over last year.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has RENHENG Enterprise Holdings Limited Been A Good Investment?
With a three year total loss of 63%, RENHENG Enterprise Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Li Liu is paid around what is normal the leaders of comparable size companies.
We like that the company is growing EPS, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. Whatever your view on compensation, you might want to check if insiders are buying or selling RENHENG Enterprise Holdings shares (free trial).
Important note: RENHENG Enterprise Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
