How Does CITIC Resources Holdings' (HKG:1205) CEO Pay Compare With Company Performance?

Zhengang Suo has been the CEO of CITIC Resources Holdings Limited (HKG:1205) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for CITIC Resources Holdings

Comparing CITIC Resources Holdings Limited's CEO Compensation With the industry

At the time of writing, our data shows that CITIC Resources Holdings Limited has a market capitalization of HK$2.4b, and reported total annual CEO compensation of HK$12m for the year to December 2019. That's a slightly lower by 6.7% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$4.6m.

On comparing similar companies from the same industry with market caps ranging from HK$1.6b to HK$6.2b, we found that the median CEO total compensation was HK$2.5m. This suggests that Zhengang Suo is paid more than the median for the industry.

On an industry level, roughly 92% of total compensation represents salary and 7.7% is other remuneration. In CITIC Resources Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at CITIC Resources Holdings Limited's Growth Numbers

Over the last three years, CITIC Resources Holdings Limited has shrunk its earnings per share by 19% per year. It saw its revenue drop 31% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 CITIC Resources Holdings Limited Been A Good Investment?

Since shareholders would have lost about 58% over three years, some CITIC Resources Holdings Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, CITIC Resources Holdings Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

So you may want to check if insiders are buying CITIC Resources Holdings shares with their own money (free access).

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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