What Did Zhong Fa Zhan Holdings Limited's (HKG:475) CEO Take Home Last Year?

Hubert Chan is the CEO of Zhong Fa Zhan Holdings Limited (HKG:475). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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.

View our latest analysis for Zhong Fa Zhan Holdings

How Does Hubert Chan's Compensation Compare With Similar Sized Companies?

Our data indicates that Zhong Fa Zhan Holdings Limited is worth HK$271m, and total annual CEO compensation is HK$9.4m. (This figure is for the year to March 2019). We note that's an increase of 47% above last year. We think total compensation is more important but we note that the CEO salary is lower, at HK$2.0m. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO total compensation in that group is HK$1.9m.

Thus we can conclude that Hubert Chan receives more in total compensation than the median of a group of companies in the same market, and of similar size to Zhong Fa Zhan Holdings Limited. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Zhong Fa Zhan Holdings has changed from year to year.

SEHK:475 CEO Compensation, August 29th 2019
SEHK:475 CEO Compensation, August 29th 2019

Is Zhong Fa Zhan Holdings Limited Growing?

Over the last three years Zhong Fa Zhan Holdings Limited has grown its earnings per share (EPS) by an average of 18% per year (using a line of best fit). In the last year, its revenue is up 429%.

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 Zhong Fa Zhan Holdings Limited Been A Good Investment?

Since shareholders would have lost about 48% over three years, some Zhong Fa Zhan Holdings Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared total CEO remuneration at Zhong Fa Zhan Holdings Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. This contrasts with the growth in CEO remuneration, in the last year. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Zhong Fa Zhan Holdings shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.