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How Should Investors Feel About China VAST Industrial Urban Development Company Limited's (HKG:6166) CEO Pay?

Simply Wall St

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Jianjun Wang has been the CEO of China VAST Industrial Urban Development Company Limited (HKG:6166) since 2014. 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.

See our latest analysis for China VAST Industrial Urban Development

How Does Jianjun Wang's Compensation Compare With Similar Sized Companies?

According to our data, China VAST Industrial Urban Development Company Limited has a market capitalization of HK$5.4b, and pays its CEO total annual compensation worth CN¥950k. (This is based on the year to December 2018). That's just a smallish increase of 2.5% on last year. We think total compensation is more important but we note that the CEO salary is lower, at CN¥658k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CN¥2.7b to CN¥11b. The median total CEO compensation was CN¥3.1m.

Most shareholders would consider it a positive that Jianjun Wang takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.

You can see a visual representation of the CEO compensation at China VAST Industrial Urban Development, below.

SEHK:6166 CEO Compensation, July 1st 2019

Is China VAST Industrial Urban Development Company Limited Growing?

China VAST Industrial Urban Development Company Limited has increased its earnings per share (EPS) by an average of 33% a year, over the last three years (using a line of best fit). It achieved revenue growth of 36% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. 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, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has China VAST Industrial Urban Development Company Limited Been A Good Investment?

With a total shareholder return of 24% over three years, China VAST Industrial Urban Development Company Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

China VAST Industrial Urban Development 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. While returns over the last few years haven't been top notch, there is nothing to suggest to us that Jianjun Wang is overcompensated.

Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. Whatever your view on compensation, you might want to check if insiders are buying or selling China VAST Industrial Urban Development shares (free trial).

Important note: China VAST Industrial Urban Development may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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. Thank you for reading.