How Is Riverine China Holdings' (HKG:1417) CEO Paid Relative To Peers?

Yuqiao Xiao became the CEO of Riverine China Holdings Limited (HKG:1417) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Riverine China Holdings.

See our latest analysis for Riverine China Holdings

How Does Total Compensation For Yuqiao Xiao Compare With Other Companies In The Industry?

According to our data, Riverine China Holdings Limited has a market capitalization of HK$770m, and paid its CEO total annual compensation worth CN¥671k over the year to December 2019. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at CN¥590.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.3m. Accordingly, Riverine China Holdings pays its CEO under the industry median.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Although there is a difference in how total compensation is set, Riverine China Holdings more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Riverine China Holdings Limited's Growth

Riverine China Holdings Limited has reduced its earnings per share by 26% a year over the last three years. It achieved revenue growth of 38% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Riverine China Holdings Limited Been A Good Investment?

Riverine China Holdings Limited has served shareholders reasonably well, with a total return of 30% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

As we touched on above, Riverine China Holdings Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. And revenue growth for the company is showing some positive trends.And revenues are growing at a healthy clip.And revenues are increasing at a good pace over the past year. But we were hoping for higher shareholder returns and positive EPS growth during this stretch, which, unfortunately, did not materialize. So even though we don't think compensation is too high, shareholders will likely want to see healthier returns, before they agree Yuqiao deserves a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Riverine China Holdings (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: Riverine China Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

If you’re looking to trade Riverine China Holdings, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.