Is Beijing Urban Construction Design & Development Group Co., Limited (HKG:1599) Excessively Paying Its CEO?

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Hanjun Wang has been the CEO of Beijing Urban Construction Design & Development Group Co., Limited (HKG:1599) since 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

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

How Does Hanjun Wang’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Beijing Urban Construction Design & Development Group Co., Limited has a market cap of HK$3.2b, and is paying total annual CEO compensation of CN¥1.1m. (This number is for the twelve months until December 2018). That’s a fairly small increase of 5.4% on year before. We think total compensation is more important but we note that the CEO salary is lower, at CN¥265k. We examined companies with market caps from CN¥1.4b to CN¥5.5b, and discovered that the median CEO total compensation of that group was CN¥2.1m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Beijing Urban Construction Design & Development Group has changed from year to year.

SEHK:1599 CEO Compensation, June 21st 2019
SEHK:1599 CEO Compensation, June 21st 2019

Is Beijing Urban Construction Design & Development Group Co., Limited Growing?

On average over the last three years, Beijing Urban Construction Design & Development Group Co., Limited has grown earnings per share (EPS) by 9.1% each year (using a line of best fit). In the last year, its revenue is up 3.1%.

I’d prefer higher revenue growth, but I’m happy with the modest EPS growth. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information. It could be important to check this free visual depiction of what analysts expect for the future.

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

Since shareholders would have lost about 31% over three years, some Beijing Urban Construction Design & Development Group Co., Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

It appears that Beijing Urban Construction Design & Development Group Co., Limited remunerates its CEO below most similar sized companies.

Hanjun Wang receives relatively low remuneration compared to similar sized companies. But the company isn’t exactly firing on all cylinders, and returns over three years are not good. Many shareholders would probably like to see improvements, but our analysis does not suggest that CEO compensation is too generous. So you may want to check if insiders are buying Beijing Urban Construction Design & Development Group 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.

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.

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.