Qiang Zhao has been the CEO of Fufeng Group Limited (HKG:546) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Qiang Zhao's Compensation Compare With Similar Sized Companies?
Our data indicates that Fufeng Group Limited is worth HK$7.9b, and total annual CEO compensation was reported as CN¥6.1m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥4.5m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CN¥2.8b to CN¥11b. The median total CEO compensation was CN¥3.3m.
Thus we can conclude that Qiang Zhao receives more in total compensation than the median of a group of companies in the same market, and of similar size to Fufeng 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 Fufeng Group has changed from year to year.
Is Fufeng Group Limited Growing?
Over the last three years Fufeng Group Limited has grown its earnings per share (EPS) by an average of 24% per year (using a line of best fit). In the last year, its revenue is up 11%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Fufeng Group Limited Been A Good Investment?
Given the total loss of 26% over three years, many shareholders in Fufeng Group Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by Fufeng Group Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shareholders may want to check for free if Fufeng Group insiders are buying or selling shares.
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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