Wuhao Ding became the CEO of 361 Degrees International Limited (HKG:1361) in 2008. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
How Does Wuhao Ding’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that 361 Degrees International Limited has a market cap of HK$2.7b, and reported total annual CEO compensation of CN¥1.2m for the year to December 2018. Notably, the salary of CN¥1.2m is the vast majority of the CEO compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CN¥1.4b to CN¥5.5b. The median total CEO compensation was CN¥2.3m.
A first glance this seems like a real positive for shareholders, since Wuhao Ding 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.
The graphic below shows how CEO compensation at 361 Degrees International has changed from year to year.
Is 361 Degrees International Limited Growing?
On average over the last three years, 361 Degrees International Limited has shrunk earnings per share by 12% each year (measured with a line of best fit). Revenue was pretty flat on last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the flat revenue is seriously uninspiring. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has 361 Degrees International Limited Been A Good Investment?
With a three year total loss of 57%, 361 Degrees International Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
361 Degrees International Limited is currently paying its CEO below what is normal for companies of its size.
Shareholders should note that compensation for Wuhao Ding is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. Considering all these factors, we’d stop short of saying the CEO pay is too high, but we don’t think shareholders would want to see a pay rise before business performance improves. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at 361 Degrees International.
Important note: 361 Degrees International 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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