Is RENHENG Enterprise Holdings Limited’s (HKG:3628) CEO Overpaid Relative To Its Peers?

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Li Liu has been the CEO of RENHENG Enterprise Holdings Limited (HKG:3628) since 1970. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for RENHENG Enterprise Holdings

How Does Li Liu’s Compensation Compare With Similar Sized Companies?

Our data indicates that RENHENG Enterprise Holdings Limited is worth HK$306m, and total annual CEO compensation is HK$1.2m. (This figure is for the year to December 2018). That’s less than last year. It is worth noting that the CEO compensation consists almost entirely of the salary, worth HK$1.2m. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO total compensation in that group is HK$1.7m.

So Li Liu receives a similar amount to the median CEO pay, amongst 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.

You can see, below, how CEO compensation at RENHENG Enterprise Holdings has changed over time.

SEHK:3628 CEO Compensation, June 3rd 2019
SEHK:3628 CEO Compensation, June 3rd 2019

Is RENHENG Enterprise Holdings Limited Growing?

Over the last three years RENHENG Enterprise Holdings Limited has grown its earnings per share (EPS) by an average of 56% per year (using a line of best fit). Its revenue is up 131% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has RENHENG Enterprise Holdings Limited Been A Good Investment?

With a three year total loss of 52%, RENHENG Enterprise Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

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

We think that the EPS growth is very pleasing, but we cannot say the same about the lacklustre shareholder returns (over the last three years). We’d be surprised if shareholders want to see a pay rise for the CEO, but we’d stop short of calling their pay too generous. So you may want to check if insiders are buying RENHENG Enterprise Holdings shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.