Is Shanghai Haohai Biological Technology Co., Ltd.'s (HKG:6826) CEO Being Overpaid?

Simply Wall St
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Jianying Wu has been the CEO of Shanghai Haohai Biological Technology Co., Ltd. (HKG:6826) since 2010. 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. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Shanghai Haohai Biological Technology

How Does Jianying Wu's Compensation Compare With Similar Sized Companies?

According to our data, Shanghai Haohai Biological Technology Co., Ltd. has a market capitalization of HK$14b, and paid its CEO total annual compensation worth CN¥1.4m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CN¥712k. We examined companies with market caps from CN¥7.1b to CN¥23b, and discovered that the median CEO total compensation of that group was CN¥3.9m.

Most shareholders would consider it a positive that Jianying Wu takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

The graphic below shows how CEO compensation at Shanghai Haohai Biological Technology has changed from year to year.

SEHK:6826 CEO Compensation, December 6th 2019
SEHK:6826 CEO Compensation, December 6th 2019

Is Shanghai Haohai Biological Technology Co., Ltd. Growing?

On average over the last three years, Shanghai Haohai Biological Technology Co., Ltd. has grown earnings per share (EPS) by 13% each year (using a line of best fit). Its revenue is up 4.3% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.

Has Shanghai Haohai Biological Technology Co., Ltd. Been A Good Investment?

Shanghai Haohai Biological Technology Co., Ltd. has generated a total shareholder return of 24% over three years, so most shareholders would 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...

Shanghai Haohai Biological Technology Co., Ltd. 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 some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest Jianying Wu is overcompensated. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. It would be an additional positive if insiders are buying shares. Shareholders may want to check for free if Shanghai Haohai Biological Technology insiders are buying or selling shares.

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

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.

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. Thank you for reading.

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