The CEO of China Huirong Financial Holdings Limited (HKG:1290) is Min Wu. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Min Wu's Compensation Compare With Similar Sized Companies?
Our data indicates that China Huirong Financial Holdings Limited is worth HK$1.2b, and total annual CEO compensation was reported as CN¥1.7m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥746k. We examined companies with market caps from CN¥710m to CN¥2.8b, and discovered that the median CEO total compensation of that group was CN¥2.1m.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where China Huirong Financial Holdings stands. On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. Non-salary compensation represents a greater slice of the remuneration pie for China Huirong Financial Holdings, in sharp contrast to the overall sector.
That means Min Wu 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. The graphic below shows how CEO compensation at China Huirong Financial Holdings has changed from year to year.
Is China Huirong Financial Holdings Limited Growing?
On average over the last three years, China Huirong Financial Holdings Limited has grown earnings per share (EPS) by 10% each year (using a line of best fit). Its revenue is up 49% over last year.
This demonstrates that the company has been improving recently. A good result. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has China Huirong Financial Holdings Limited Been A Good Investment?
China Huirong Financial Holdings Limited has not done too badly by shareholders, with a total return of 0.5%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
Min Wu is paid around what is normal for the leaders of comparable size companies.
We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. So upon reflection one could argue that the CEO pay is quite reasonable. Shifting gears from CEO pay for a second, we've spotted 2 warning signs for China Huirong Financial Holdings you should be aware of, and 1 of them is concerning.
If you want to buy a stock that is better than China Huirong Financial Holdings, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.