How Should Investors React To Tianjin Port Development Holdings Limited's (HKG:3382) CEO Pay?

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In 2010 Quanyong Li was appointed CEO of Tianjin Port Development Holdings Limited (HKG:3382). 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

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See our latest analysis for Tianjin Port Development Holdings

How Does Quanyong Li's Compensation Compare With Similar Sized Companies?

According to our data, Tianjin Port Development Holdings Limited has a market capitalization of HK$5.1b, and pays its CEO total annual compensation worth HK$2.9m. (This figure is for the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at HK$2.2m. We examined companies with market caps from HK$3.1b to HK$13b, and discovered that the median CEO total compensation of that group was HK$3.1m.

That means Quanyong Li 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 a visual representation of the CEO compensation at Tianjin Port Development Holdings, below.

SEHK:3382 CEO Compensation, May 20th 2019
SEHK:3382 CEO Compensation, May 20th 2019

Is Tianjin Port Development Holdings Limited Growing?

On average over the last three years, Tianjin Port Development Holdings Limited has grown earnings per share (EPS) by 3.2% each year (using a line of best fit). It saw its revenue drop -4.5% over the last year.

I would prefer it if there was revenue growth, but I'm happy with the EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Tianjin Port Development Holdings Limited Been A Good Investment?

Given the total loss of 14% over three years, many shareholders in Tianjin Port Development Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Remuneration for Quanyong Li is close enough to the median pay for a CEO of a similar sized company .

We would like to see somewhat stronger per share growth. And it's hard to argue that the returns over the last three years have delighted. So it would take a bold person to suggest the pay is too modest. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Tianjin Port Development Holdings (free visualization of insider trades).

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.

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