In 2017 Jianxin Zong was appointed CEO of Chong Hing Bank Limited (HKG:1111). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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.
See our latest analysis for Chong Hing Bank
How Does Jianxin Zong's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Chong Hing Bank Limited has a market cap of HK$11b, and reported total annual CEO compensation of HK$14m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$9.0m. We looked at a group of companies with market capitalizations from HK$7.8b to HK$25b, and the median CEO total compensation was HK$4.4m.
Thus we can conclude that Jianxin Zong receives more in total compensation than the median of a group of companies in the same market, and of similar size to Chong Hing Bank Limited. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Chong Hing Bank has changed from year to year.
Is Chong Hing Bank Limited Growing?
On average over the last three years, Chong Hing Bank Limited has shrunk earnings per share by 2.3% each year (measured with a line of best fit). Its revenue is up 11% over last year.
In the last three years the company has failed to grow earnings per share. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Chong Hing Bank Limited Been A Good Investment?
Since shareholders would have lost about 28% over three years, some Chong Hing Bank Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared total CEO remuneration at Chong Hing Bank Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years. Just as bad, share price gains for investors have failed to materialize, over the same period. Some might well form the view that the CEO is paid too generously! Shifting gears from CEO pay for a second, we've picked out 2 warning signs for Chong Hing Bank that investors should be aware of in a dynamic business environment.
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.
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.
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. Thank you for reading.
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