Yongtian Shang has been the CEO of Beijing Jingkelong Company Limited (HKG:814) since 2015. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Yongtian Shang's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Beijing Jingkelong Company Limited has a market cap of HK$548m, and is paying total annual CEO compensation of CN¥658k. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at CN¥458k. We examined a group of similar sized companies, with market capitalizations of below CN¥1.4b. The median CEO total compensation in that group is CN¥1.6m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Beijing Jingkelong has changed over time.
Is Beijing Jingkelong Company Limited Growing?
On average over the last three years, Beijing Jingkelong Company Limited has grown earnings per share (EPS) by 39% each year (using a line of best fit). In the last year, its revenue is down -2.2%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.
Has Beijing Jingkelong Company Limited Been A Good Investment?
Given the total loss of 4.5% over three years, many shareholders in Beijing Jingkelong 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.
Beijing Jingkelong Company Limited is currently paying its CEO below what is normal for companies of its size. Considering the underlying business is growing earnings, this would suggest the pay is modest. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we don't think, Yongtian Shang is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out.
When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Beijing Jingkelong.
If you want to buy a stock that is better than Beijing Jingkelong, this free list of high return, low debt companies is a great place to look.
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