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Is Shenzhou International Group Holdings Limited's (HKG:2313) CEO Overpaid Relative To Its Peers?

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Simply Wall St
·3 min read
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The CEO of Shenzhou International Group Holdings Limited (HKG:2313) is Guanlin Huang. This analysis aims first to contrast CEO compensation with other large 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.

View our latest analysis for Shenzhou International Group Holdings

How Does Guanlin Huang's Compensation Compare With Similar Sized Companies?

According to our data, Shenzhou International Group Holdings Limited has a market capitalization of HK$141b, and paid its CEO total annual compensation worth CN¥1.4m over the year to December 2018. Notably, the salary of CN¥1.4m is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations over CN¥57b and the median CEO total compensation was CN¥6.2m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Shenzhou International Group Holdings stands. On an industry level, roughly 87% of total compensation represents salary and 13% is other remuneration. Investors will find it interesting that Shenzhou International Group Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits.

At first glance this seems like a real positive for shareholders, since Guanlin Huang is paid less than the average total compensation paid by other large companies. 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 Shenzhou International Group Holdings, below.

SEHK:2313 CEO Compensation April 21st 2020
SEHK:2313 CEO Compensation April 21st 2020

Is Shenzhou International Group Holdings Limited Growing?

On average over the last three years, Shenzhou International Group Holdings Limited has seen earnings per share (EPS) move in a favourable direction by 15% each year (using a line of best fit). Its revenue is up 8.2% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.

Has Shenzhou International Group Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with Shenzhou International Group Holdings Limited for providing a total return of 94% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

It appears that Shenzhou International Group Holdings Limited remunerates its CEO below most large companies.

Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Guanlin Huang deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Shenzhou International Group Holdings.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.