Is Shanghai Jiaoda Withub Information Industrial Company Limited's (HKG:8205) CEO Paid Enough Relative To Peers?
In 2014 Ling Shang was appointed CEO of Shanghai Jiaoda Withub Information Industrial Company Limited (HKG:8205). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.
See our latest analysis for Shanghai Jiaoda Withub Information Industrial
How Does Ling Shang's Compensation Compare With Similar Sized Companies?
Our data indicates that Shanghai Jiaoda Withub Information Industrial Company Limited is worth HK$95m, and total annual CEO compensation was reported as CN¥554k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥404k. We examined a group of similar sized companies, with market capitalizations of below CN¥1.4b. The median CEO total compensation in that group is CN¥1.6m.
Most shareholders would consider it a positive that Ling Shang takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Shanghai Jiaoda Withub Information Industrial, below.
Is Shanghai Jiaoda Withub Information Industrial Company Limited Growing?
Over the last three years Shanghai Jiaoda Withub Information Industrial Company Limited has grown its earnings per share (EPS) by an average of 57% per year (using a line of best fit). In the last year, its revenue is up 20%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. 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 Shanghai Jiaoda Withub Information Industrial Company Limited Been A Good Investment?
With a three year total loss of 66%, Shanghai Jiaoda Withub Information Industrial Company Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
It appears that Shanghai Jiaoda Withub Information Industrial Company Limited remunerates its CEO below most similar sized companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we don't think, Ling Shang is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. Shifting gears from CEO pay for a second, we've spotted 2 warning signs for Shanghai Jiaoda Withub Information Industrial you should be aware of, and 1 of them is potentially serious.
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.
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