How Much Is Guangdong Adway Construction (Group) Holdings Company Limited (HKG:6189) Paying Its CEO?

Yujing Ye has been the CEO of Guangdong Adway Construction (Group) Holdings Company Limited (HKG:6189) since 2012, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Guangdong Adway Construction (Group) Holdings.

View our latest analysis for Guangdong Adway Construction (Group) Holdings

How Does Total Compensation For Yujing Ye Compare With Other Companies In The Industry?

At the time of writing, our data shows that Guangdong Adway Construction (Group) Holdings Company Limited has a market capitalization of HK$200m, and reported total annual CEO compensation of CN¥731k for the year to December 2019. That is, the compensation was roughly the same as last year. Notably, the salary which is CN¥696.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.7m. In other words, Guangdong Adway Construction (Group) Holdings pays its CEO lower than the industry median. Furthermore, Yujing Ye directly owns HK$54m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 91% of total compensation represents salary and 8.7% is other remuneration. Investors will find it interesting that Guangdong Adway Construction (Group) Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Guangdong Adway Construction (Group) Holdings Company Limited's Growth

Over the last three years, Guangdong Adway Construction (Group) Holdings Company Limited has shrunk its earnings per share by 32% per year. Its revenue is down 48% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Guangdong Adway Construction (Group) Holdings Company Limited Been A Good Investment?

Since shareholders would have lost about 90% over three years, some Guangdong Adway Construction (Group) Holdings Company Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Guangdong Adway Construction (Group) Holdings pays its CEO a majority of compensation through a salary. As we noted earlier, Guangdong Adway Construction (Group) Holdings pays its CEO lower than the norm for similar-sized companies belonging to the same industry. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. It's tough to say that Yujing is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Guangdong Adway Construction (Group) Holdings you should be aware of, and 1 of them shouldn't be ignored.

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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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