Is China Flavors and Fragrances Company Limited (HKG:3318) Excessively Paying Its CEO?
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Ming Fan Wang became the CEO of China Flavors and Fragrances Company Limited (HKG:3318) in 2005. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for China Flavors and Fragrances
How Does Ming Fan Wang's Compensation Compare With Similar Sized Companies?
Our data indicates that China Flavors and Fragrances Company Limited is worth HK$1.6b, and total annual CEO compensation is CN¥1.5m. (This figure is for the year to December 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth CN¥1.5m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CN¥687m to CN¥2.7b. The median total CEO compensation was CN¥1.8m.
That means Ming Fan Wang receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at China Flavors and Fragrances has changed over time.
Is China Flavors and Fragrances Company Limited Growing?
On average over the last three years, China Flavors and Fragrances Company Limited has grown earnings per share (EPS) by 13% each year (using a line of best fit). Its revenue is up 5.3% over last year.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has China Flavors and Fragrances Company Limited Been A Good Investment?
Given the total loss of 31% over three years, many shareholders in China Flavors and Fragrances 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.
In Summary...
Remuneration for Ming Fan Wang is close enough to the median pay for a CEO of a similar sized company .
We think that the EPS growth is very pleasing, but it's disappointing to see negative shareholder returns over three years. Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. Shareholders may want to check for free if China Flavors and Fragrances insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.
