What Can We Learn About China First Capital Group's (HKG:1269) CEO Compensation?

Zhijun Zhao has been the CEO of China First Capital Group Limited (HKG:1269) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether China First Capital Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for China First Capital Group

How Does Total Compensation For Zhijun Zhao Compare With Other Companies In The Industry?

According to our data, China First Capital Group Limited has a market capitalization of HK$593m, and paid its CEO total annual compensation worth CN¥686k over the year to December 2019. Notably, that's a decrease of 15% over the year before. Notably, the salary which is CN¥410.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥929k. So it looks like China First Capital Group compensates Zhijun Zhao in line with the median for the industry.

On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. In China First Capital Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at China First Capital Group Limited's Growth Numbers

China First Capital Group Limited has reduced its earnings per share by 72% a year over the last three years. In the last year, its revenue is down 3.4%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has China First Capital Group Limited Been A Good Investment?

Since shareholders would have lost about 96% over three years, some China First Capital Group Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Zhijun is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for China First Capital Group (of which 2 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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.

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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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