Stock Analysis

A Quick Analysis On Beijing Urban Construction Design & Development Group's (HKG:1599) CEO Compensation

SEHK:1599
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This article will reflect on the compensation paid to Hanjun Wang who has served as CEO of Beijing Urban Construction Design & Development Group Co., Limited (HKG:1599) since 2011. This analysis will also assess whether Beijing Urban Construction Design & Development Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Beijing Urban Construction Design & Development Group

How Does Total Compensation For Hanjun Wang Compare With Other Companies In The Industry?

Our data indicates that Beijing Urban Construction Design & Development Group Co., Limited has a market capitalization of HK$2.6b, and total annual CEO compensation was reported as CN¥1.2m for the year to December 2019. That's a fairly small increase of 5.1% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥311k.

On examining similar-sized companies in the industry with market capitalizations between HK$1.6b and HK$6.2b, we discovered that the median CEO total compensation of that group was CN¥1.3m. This suggests that Beijing Urban Construction Design & Development Group remunerates its CEO largely in line with the industry average. What's more, Hanjun Wang holds HK$2.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20192018Proportion (2019)
Salary CN¥311k CN¥265k 26%
Other CN¥867k CN¥856k 74%
Total CompensationCN¥1.2m CN¥1.1m100%

On an industry level, around 91% of total compensation represents salary and 8.7% is other remuneration. In Beijing Urban Construction Design & Development Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
SEHK:1599 CEO Compensation December 17th 2020

A Look at Beijing Urban Construction Design & Development Group Co., Limited's Growth Numbers

Over the past three years, Beijing Urban Construction Design & Development Group Co., Limited has seen its earnings per share (EPS) grow by 9.8% per year. It achieved revenue growth of 25% over the last year.

We would argue that the modest growth in revenue is a notable positive. And the improvement in EPSis modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Beijing Urban Construction Design & Development Group Co., Limited Been A Good Investment?

With a three year total loss of 49% for the shareholders, Beijing Urban Construction Design & Development Group Co., Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, Beijing Urban Construction Design & Development Group pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, Beijing Urban Construction Design & Development Group is suffering from adverse shareholder returns and althoughEPS have grown over the past three years, they have not been extraordinary. We'd stop short of saying CEO compensation is inappropriate, but without an improvement in performance, it's sure to draw criticism. Shareholders will also not want to see performance improving before agreeing to any raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Beijing Urban Construction Design & Development Group that investors should look into moving forward.

Important note: Beijing Urban Construction Design & Development Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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