Should You Worry About Ronshine China Holdings Limited's (HKG:3301) CEO Salary Level?
Zonghong Ou has been the CEO of Ronshine China Holdings Limited (HKG:3301) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Ronshine China Holdings
How Does Zonghong Ou's Compensation Compare With Similar Sized Companies?
Our data indicates that Ronshine China Holdings Limited is worth HK$16b, and total annual CEO compensation is CN¥2.3m. (This figure is for the year to December 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth CN¥2.2m. We looked at a group of companies with market capitalizations from CN¥7.1b to CN¥23b, and the median CEO total compensation was CN¥4.2m.
A first glance this seems like a real positive for shareholders, since Zonghong Ou is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Ronshine China Holdings has changed over time.
Is Ronshine China Holdings Limited Growing?
On average over the last three years, Ronshine China Holdings Limited has grown earnings per share (EPS) by 10% each year (using a line of best fit). In the last year, its revenue is up 43%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Ronshine China Holdings Limited Been A Good Investment?
Ronshine China Holdings Limited has served shareholders reasonably well, with a total return of 25% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
It looks like Ronshine China Holdings Limited pays its CEO less than similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest Zonghong Ou is overcompensated.
It's good to see reasonable payment of the CEO, even while the business improves. It would be an additional positive if insiders are buying shares. So you may want to check if insiders are buying Ronshine China Holdings shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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.
