Does West China Cement Limited’s (HKG:2233) CEO Pay Reflect Performance?

In 2015 Weiping Ma was appointed CEO of West China Cement Limited (HKG:2233). 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. 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 West China Cement

How Does Weiping Ma’s Compensation Compare With Similar Sized Companies?

According to our data, West China Cement Limited has a market capitalization of HK$7.2b, and pays its CEO total annual compensation worth CN¥3.8m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at CN¥3.4m. We examined companies with market caps from CN¥2.9b to CN¥11b, and discovered that the median CEO total compensation of that group was CN¥3.7m.

So Weiping Ma is paid around the average of 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, below, how CEO compensation at West China Cement has changed over time.

SEHK:2233 CEO Compensation, September 1st 2019
SEHK:2233 CEO Compensation, September 1st 2019

Is West China Cement Limited Growing?

Over the last three years West China Cement Limited has grown its earnings per share (EPS) by an average of 83% per year (using a line of best fit). In the last year, its revenue is up 26%.

This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business.

Has West China Cement Limited Been A Good Investment?

I think that the total shareholder return of 91%, over three years, would leave most West China Cement Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

Weiping Ma is paid around what is normal the leaders of comparable size companies.

The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling West China Cement (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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.