Yahoo Finance Is China Construction Bank Corporation’s (HKG:939) CEO Paid At A Competitive Rate?
In 2015 Zuji Wang was appointed CEO of China Construction Bank Corporation (HKG:939). This analysis aims first to contrast CEO compensation with other large companies. Next, we’ll consider growth that the business demonstrates. 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.
View our latest analysis for China Construction Bank
How Does Zuji Wang’s Compensation Compare With Similar Sized Companies?
Our data indicates that China Construction Bank Corporation is worth HK$1.7t, and total annual CEO compensation is CN¥660k. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at CN¥519k. When we examined a group of companies with market caps over CN¥55b, we found that their median CEO compensation was CN¥4.6m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).
A first glance this seems like a real positive for shareholders, since Zuji Wang is paid less than the average compensation paid by other large 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 China Construction Bank, below.
Is China Construction Bank Corporation Growing?
Over the last three years China Construction Bank Corporation has grown its earnings per share (EPS) by an average of 3.5% per year. Its revenue is up 4.8% over last year.
I would argue that the improvement in revenue isn’t particularly impressive, but I’m happy with the modest EPS growth. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information.
You might want to check this free visual report on analyst forecasts for future earnings.
Has China Construction Bank Corporation Been A Good Investment?
I think that the total shareholder return of 52%, over three years, would leave most China Construction Bank Corporation shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
In Summary…
China Construction Bank Corporation is currently paying its CEO below what is normal for large companies.
Zuji Wang receives relatively low remuneration compared to other large companies. And the returns to shareholders were great, over the last few years. We would like to see EPS growth, but in our view it seems the CEO is modestly remunerated. Whatever your view on compensation, you might want to check if insiders are buying or selling China Construction Bank shares (free trial).
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
