The CEO of China Automotive Interior Decoration Holdings Limited (HKG:48) is Yuejin Zhuang. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for China Automotive Interior Decoration Holdings

How Does Yuejin Zhuang's Compensation Compare With Similar Sized Companies?

Our data indicates that China Automotive Interior Decoration Holdings Limited is worth HK$21m, and total annual CEO compensation was reported as CN¥380k for the year to December 2018. We took a group of companies with market capitalizations below CN¥1.4b, and calculated the median CEO total compensation to be CN¥1.6m.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where China Automotive Interior Decoration Holdings stands. Talking in terms of the sector, salary represented approximately 72% of total compensation out of all the companies we analysed, while other remuneration made up 28% of the pie. Non-salary compensation represents a greater slice of the remuneration pie for China Automotive Interior Decoration Holdings, in sharp contrast to the overall sector.

At first glance this seems like a real positive for shareholders, since Yuejin Zhuang is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance. You can see, below, how CEO compensation at China Automotive Interior Decoration Holdings has changed over time.

Is China Automotive Interior Decoration Holdings Limited Growing?

China Automotive Interior Decoration Holdings Limited has seen earnings per share (EPS) move positively by an average of 63% a year, over the last three years (using a line of best fit). Its revenue is up 34% over last year.

This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has China Automotive Interior Decoration Holdings Limited Been A Good Investment?

Given the total loss of 93% over three years, many shareholders in China Automotive Interior Decoration 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...

It looks like China Automotive Interior Decoration Holdings Limited pays its CEO less than 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. We're not critical of the remuneration Yuejin Zhuang receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. 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. Taking a breather from CEO compensation, we've spotted 4 warning signs for China Automotive Interior Decoration Holdings (of which 2 are potentially serious!) you should know about in order to have a holistic understanding of the stock.

Important note: China Automotive Interior Decoration Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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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