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In 2015 Shi Hong Zhang was appointed CEO of China Ocean Industry Group Limited (HKG:651). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
How Does Shi Hong Zhang’s Compensation Compare With Similar Sized Companies?
According to our data, China Ocean Industry Group Limited has a market capitalization of HK$218m, and pays its CEO total annual compensation worth HK$1.2m. (This is based on the year to 2017). Notably, the salary of HK$1.2m is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO compensation to be HK$1.7m.
So Shi Hong Zhang is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at China Ocean Industry Group, below.
Is China Ocean Industry Group Limited Growing?
On average over the last three years, China Ocean Industry Group Limited has grown earnings per share (EPS) by 14% each year (using a line of best fit). Its revenue is down -41% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has China Ocean Industry Group Limited Been A Good Investment?
Given the total loss of 89% over three years, many shareholders in China Ocean Industry Group Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Shi Hong Zhang is paid around what is normal the leaders of comparable size companies.
We’d say the company can boast of its EPS growth, but it’s disappointing to see negative shareholder returns over three years. Considering the the positives we don’t think the CEO pays is too high, but it’s certainly hard to argue it is too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling China Ocean Industry Group (free visualization of insider trades).
If you want to buy a stock that is better than China Ocean Industry Group, this free list of high return, low debt companies is a great place to look.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.