Is Beijing Urban Construction Design & Development Group Co., Limited’s (HKG:1599) CEO Overpaid Relative To Its Peers?

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Hanjun Wang became the CEO of Beijing Urban Construction Design & Development Group Co., Limited (HKG:1599) in 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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?

According to our data, Beijing Urban Construction Design & Development Group Co., Limited has a market capitalization of HK$3.2b, and pays its CEO total annual compensation worth 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. While we always look at total compensation first, we note that the salary component is less, at CN¥265k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CN¥1.4b to CN¥5.5b. The median total CEO compensation 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.

You can see a visual representation of the CEO compensation at Beijing Urban Construction Design & Development Group, below.

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. So there are some positives here, but not enough to earn high praise. 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?

Given the total loss of 31% over three years, many shareholders in Beijing Urban Construction Design & Development Group Co., Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

Beijing Urban Construction Design & Development Group Co., Limited is currently paying its CEO below what is normal for companies of its size.

It’s well worth noting that while Hanjun Wang is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. So while shareholders shouldn’t be overly concerned about CEO compensation, they would probably like to see improved shareholder returns before seeing a pay increase. Whatever your view on compensation, you might want to check if insiders are buying or selling Beijing Urban Construction Design & Development Group shares (free trial).

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.