Does Great China Properties Holdings Limited’s (HKG:21) CEO Pay Reflect Performance?

Wenxi Huang became the CEO of Great China Properties Holdings Limited (HKG:21) in 2007. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Great China Properties Holdings

How Does Wenxi Huang’s Compensation Compare With Similar Sized Companies?

Our data indicates that Great China Properties Holdings Limited is worth HK$501m, and total annual CEO compensation was reported as HK$1.3m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at HK$1.2m. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.8m.

So Wenxi Huang receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Great China Properties Holdings, below.

SEHK:21 CEO Compensation, January 20th 2020
SEHK:21 CEO Compensation, January 20th 2020

Is Great China Properties Holdings Limited Growing?

Great China Properties Holdings Limited has increased its earnings per share (EPS) by an average of 48% a year, over the last three years (using a line of best fit). Its revenue is up 121% over last year.

This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. 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 Great China Properties Holdings Limited Been A Good Investment?

With a three year total loss of 52%, Great China Properties Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

Wenxi Huang is paid around what is normal the leaders of comparable size companies.

We’d say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the the positives we don’t think the CEO pays is too high, but it’s certainly hard to argue it is too low. So you may want to check if insiders are buying Great China Properties Holdings shares with their own money (free access).

Important note: Great China Properties 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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