Does Bank of Zhengzhou Co., Ltd.’s (HKG:6196) CEO Pay Compare Well With Peers?

Xueqing Shen is the CEO of Bank of Zhengzhou Co., Ltd. (HKG:6196). 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. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Bank of Zhengzhou

How Does Xueqing Shen’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Bank of Zhengzhou Co., Ltd. has a market cap of HK$36b, and is paying total annual CEO compensation of CN¥3.0m. (This is based on the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at CN¥871k. When we examined a selection of companies with market caps ranging from CN¥13b to CN¥43b, we found the median CEO total compensation was CN¥2.6m.

So Xueqing Shen is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Bank of Zhengzhou has changed from year to year.

SEHK:6196 CEO Compensation, April 2nd 2019
SEHK:6196 CEO Compensation, April 2nd 2019

Is Bank of Zhengzhou Co., Ltd. Growing?

Bank of Zhengzhou Co., Ltd. has increased its earnings per share (EPS) by an average of 3.6% a year, over the last three years (using a line of best fit). It achieved revenue growth of 7.8% over the last year.

I’m not particularly impressed by the revenue growth, but the modest improvement in EPS is good. Considering these factors I’d say performance has been pretty decent, though not amazing. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Bank of Zhengzhou Co., Ltd. Been A Good Investment?

Since shareholders would have lost about 8.7% over three years, some Bank of Zhengzhou Co., Ltd. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

Remuneration for Xueqing Shen is close enough to the median pay for a CEO of a similar sized company .

We would like to see somewhat stronger per share growth. And it’s hard to argue that the returns over the last three years have delighted. So suffice it to say we don’t think the compensation is modest! So you may want to check if insiders are buying Bank of Zhengzhou shares with their own money (free access).

Important note: Bank of Zhengzhou 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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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. Thank you for reading.