Why Shanghai Jiaoda Withub Information Industrial Company Limited's (HKG:8205) CEO Pay Matters To You
Ling Shang has been the CEO of Shanghai Jiaoda Withub Information Industrial Company Limited (HKG:8205) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Shanghai Jiaoda Withub Information Industrial
How Does Ling Shang's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Shanghai Jiaoda Withub Information Industrial Company Limited has a market cap of HK$115m, and is paying total annual CEO compensation of CN¥554k. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at CN¥404k. We took a group of companies with market capitalizations below CN¥1.4b, and calculated the median CEO total compensation to be CN¥1.6m.
Most shareholders would consider it a positive that Ling Shang takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Shanghai Jiaoda Withub Information Industrial has changed over time.
Is Shanghai Jiaoda Withub Information Industrial Company Limited Growing?
Over the last three years Shanghai Jiaoda Withub Information Industrial Company Limited has grown its earnings per share (EPS) by an average of 16% per year (using a line of best fit). Its revenue is up 12% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Shanghai Jiaoda Withub Information Industrial Company Limited Been A Good Investment?
Given the total loss of 63% over three years, many shareholders in Shanghai Jiaoda Withub Information Industrial Company Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
It appears that Shanghai Jiaoda Withub Information Industrial Company Limited remunerates its CEO below most similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. We're not critical of the remuneration Ling Shang receives, but it would be good to see improved returns to shareholders before the remuneration grows too much.
This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Shanghai Jiaoda Withub Information Industrial.
Important note: Shanghai Jiaoda Withub Information Industrial 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.
