Yahoo Finance Is Shenzhen Investment Limited (HKG:604) Excessively Paying Its CEO?
Wei Huang has been the CEO of Shenzhen Investment Limited (HKG:604) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. 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 Shenzhen Investment
How Does Wei Huang's Compensation Compare With Similar Sized Companies?
According to our data, Shenzhen Investment Limited has a market capitalization of HK$24b, and pays its CEO total annual compensation worth HK$6.3m. (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 HK$3.0m. We examined companies with market caps from HK$16b to HK$50b, and discovered that the median CEO total compensation of that group was HK$4.0m.
As you can see, Wei Huang is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Shenzhen Investment Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Shenzhen Investment has changed over time.
Is Shenzhen Investment Limited Growing?
Shenzhen Investment Limited has reduced its earnings per share by an average of 6.3% a year, over the last three years (measured with a line of best fit). Its revenue is up 62% over last year.
The reduction in earnings per share, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has Shenzhen Investment Limited Been A Good Investment?
With a total shareholder return of 4.4% over three years, Shenzhen Investment Limited has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
We compared the total CEO remuneration paid by Shenzhen Investment Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
One might like to have seen stronger growth, and the shareholder returns have failed to inspire, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Shenzhen Investment.
If you want to buy a stock that is better than Shenzhen Investment, this free list of high return, low debt companies is a great place to look.
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.
