What Can We Make Of China High Speed Transmission Equipment Group's (HKG:658) CEO Compensation?

Jichun Hu has been the CEO of China High Speed Transmission Equipment Group Co., Ltd. (HKG:658) since 2016, 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 China High Speed Transmission Equipment Group.

See our latest analysis for China High Speed Transmission Equipment Group

How Does Total Compensation For Jichun Hu Compare With Other Companies In The Industry?

Our data indicates that China High Speed Transmission Equipment Group Co., Ltd. has a market capitalization of HK$9.6b, and total annual CEO compensation was reported as CN¥2.5m for the year to December 2019. This means that the compensation hasn't changed much from last year. Notably, the salary which is CN¥2.40m, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between HK$7.8b and HK$25b had a median total CEO compensation of CN¥2.2m. So it looks like China High Speed Transmission Equipment Group compensates Jichun Hu in line with the median for the industry.

On an industry level, around 90% of total compensation represents salary and 9.8% is other remuneration. Investors will find it interesting that China High Speed Transmission Equipment Group 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.

A Look at China High Speed Transmission Equipment Group Co., Ltd.'s Growth Numbers

Over the last three years, China High Speed Transmission Equipment Group Co., Ltd. has shrunk its earnings per share by 23% per year. In the last year, its revenue is up 25%.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has China High Speed Transmission Equipment Group Co., Ltd. Been A Good Investment?

Given the total shareholder loss of 30% over three years, many shareholders in China High Speed Transmission Equipment Group Co., Ltd. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

China High Speed Transmission Equipment Group pays its CEO a majority of compensation through a salary. As we noted earlier, China High Speed Transmission Equipment Group pays its CEO in line with similar-sized companies belonging to the same industry. But revenue growth seems to be inching northward, a heartening sign for the company. In contrast, over the same time span, shareholder returns are negative. EPS growth is bleak as well, adding fuel to the fire. We'd say CEO compensation isn't unfair, but shareholders may be wary of a bump in pay before the company substantially improves overall performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 5 warning signs (and 1 which is concerning) in China High Speed Transmission Equipment Group we think you should know about.

Switching gears from China High Speed Transmission Equipment Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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