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Should You Worry About China ZhengTong Auto Services Holdings Limited's (HKG:1728) CEO Pay?

Simply Wall St

Ivan Koh has been the CEO of China ZhengTong Auto Services Holdings Limited (HKG:1728) since 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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.

See our latest analysis for China ZhengTong Auto Services Holdings

How Does Ivan Koh's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that China ZhengTong Auto Services Holdings Limited has a market cap of HK$6.8b, and reported total annual CEO compensation of CN¥3.9m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥2.4m. 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.

That means Ivan Koh receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at China ZhengTong Auto Services Holdings has changed over time.

SEHK:1728 CEO Compensation, January 3rd 2020

Is China ZhengTong Auto Services Holdings Limited Growing?

Over the last three years China ZhengTong Auto Services Holdings Limited has grown its earnings per share (EPS) by an average of 25% per year (using a line of best fit). It saw its revenue drop 6.5% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.

Has China ZhengTong Auto Services Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 40% over three years, China ZhengTong Auto Services Holdings Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Ivan Koh is paid around what is normal the leaders of comparable size companies.

Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Indeed, many might consider the pay rather modest, given the solid company performance! So you may want to check if insiders are buying China ZhengTong Auto Services Holdings shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.