Weiping Ma became the CEO of West China Cement Limited (HKG:2233) in 2015. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
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$7.8b, and paid its CEO total annual compensation worth CN¥3.8m over the year to December 2019. That’s a fairly small increase of 0.9% on year before. While we always look at total compensation first, we note that the salary component is less, at CN¥2.0m. 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¥3.6m.
Now let’s take a look at the pay mix on an industry and company level to gain a better understanding of where West China Cement stands. Speaking on an industry level, we can see that nearly 81% of total compensation represents salary, while the remainder of 19% is other remuneration. Non-salary compensation represents a greater slice of the remuneration pie for West China Cement, in sharp contrast to the overall sector.
So Weiping Ma receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance. You can see, below, how CEO compensation at West China Cement has changed over time.
Is West China Cement Limited Growing?
On average over the last three years, West China Cement Limited has seen earnings per share (EPS) move in a favourable direction by 59% each year (using a line of best fit). Its revenue is up 23% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has West China Cement Limited Been A Good Investment?
I think that the total shareholder return of 36%, over three years, would leave most West China Cement Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Weiping Ma is paid around what is normal for the leaders of comparable size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Taking a breather from CEO compensation, we’ve spotted 3 warning signs for West China Cement (of which 1 is a bit unpleasant!) you should know about in order to have a holistic understanding of the stock.
Important note: West China Cement 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.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.