The CEO of Shuanghua Holdings Limited (HKG:1241) is Ping Zheng, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Shuanghua Holdings
How Does Total Compensation For Ping Zheng Compare With Other Companies In The Industry?
Our data indicates that Shuanghua Holdings Limited has a market capitalization of HK$67m, and total annual CEO compensation was reported as CN¥1.1m for the year to December 2019. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at CN¥1.00m constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥686k. Hence, we can conclude that Ping Zheng is remunerated higher than the industry median. Furthermore, Ping Zheng directly owns HK$28m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CN¥1.0m | CN¥1.0m | 89% |
| Other | CN¥120k | CN¥120k | 11% |
| Total Compensation | CN¥1.1m | CN¥1.1m | 100% |
Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. It's interesting to note that Shuanghua Holdings pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Shuanghua Holdings Limited's Growth Numbers
Shuanghua Holdings Limited has reduced its earnings per share by 26% a year over the last three years. In the last year, its revenue is up 16%.
The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Shuanghua Holdings Limited Been A Good Investment?
With a three year total loss of 79% for the shareholders, Shuanghua Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As previously discussed, Ping is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. It concerns us that EPS growth for the company is negative, while share price gains did not materialize over the last three years. In contrast, revenue growth for the company has been showing a positive trend. Suffice it to say, we don't think the CEO is underpaid!
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Shuanghua Holdings that you should be aware of before investing.
Switching gears from Shuanghua Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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.
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About SEHK:1241
Shuanghua Holdings
An investment holding company, manufactures, imports, exports, and sells automobile air-conditioner parts and components in China, rest of Asia, and internationally.
Flawless balance sheet and slightly overvalued.
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