In 2010 Chunbao Shi was appointed CEO of Beijing Chunlizhengda Medical Instruments Co., Ltd. (HKG:1858). 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Chunbao Shi's Compensation Compare With Similar Sized Companies?
According to our data, Beijing Chunlizhengda Medical Instruments Co., Ltd. has a market capitalization of HK$9.4b, and paid its CEO total annual compensation worth CN¥1.5m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥600k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from CN¥6.9b to CN¥22b, we found the median CEO total compensation was CN¥3.7m.
A first glance this seems like a real positive for shareholders, since Chunbao Shi is paid less than the average total compensation paid by similar sized companies. 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 Beijing Chunlizhengda Medical Instruments, below.
Is Beijing Chunlizhengda Medical Instruments Co., Ltd. Growing?
Over the last three years Beijing Chunlizhengda Medical Instruments Co., Ltd. has grown its earnings per share (EPS) by an average of 37% per year (using a line of best fit). Its revenue is up 70% over last year.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.
Has Beijing Chunlizhengda Medical Instruments Co., Ltd. Been A Good Investment?
Boasting a total shareholder return of 1070% over three years, Beijing Chunlizhengda Medical Instruments Co., Ltd. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It appears that Beijing Chunlizhengda Medical Instruments Co., Ltd. remunerates its CEO below most similar sized companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Chunbao Shi deserves a raise! It's not often we see shareholders do so well, and yet the CEO is paid modestly. The cherry on top would be if company insiders are buying shares with their own money. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Beijing Chunlizhengda Medical Instruments (free visualization of insider trades).
If you want to buy a stock that is better than Beijing Chunlizhengda Medical Instruments, this free list of high return, low debt companies is a great place to look.
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