Jiakun Wei became the CEO of Weiqiao Textile Company Limited (HKG:2698) in 2014, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Weiqiao Textile
How Does Total Compensation For Jiakun Wei Compare With Other Companies In The Industry?
Our data indicates that Weiqiao Textile Company Limited has a market capitalization of HK$2.1b, and total annual CEO compensation was reported as CN¥704k for the year to December 2019. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥87k.
On comparing similar companies from the same industry with market caps ranging from HK$775m to HK$3.1b, we found that the median CEO total compensation was CN¥1.9m. In other words, Weiqiao Textile pays its CEO lower than the industry median.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CN¥87k | CN¥93k | 12% |
| Other | CN¥617k | CN¥618k | 88% |
| Total Compensation | CN¥704k | CN¥711k | 100% |
On an industry level, roughly 93% of total compensation represents salary and 7.4% is other remuneration. Weiqiao Textile pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Weiqiao Textile Company Limited's Growth Numbers
Over the last three years, Weiqiao Textile Company Limited has shrunk its earnings per share by 44% per year. In the last year, its revenue is down 19%.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Weiqiao Textile Company Limited Been A Good Investment?
Since shareholders would have lost about 45% over three years, some Weiqiao Textile 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...
As previously discussed, Jiakun is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Weiqiao Textile (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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About SEHK:2698
Weiqiao Textile
Weiqiao Textile Company Limited, together with its subsidiaries, engages in the manufacture and sale of cotton yarns, grey fabrics, and denims in Mainland China, Hong Kong, East Asia, Southeast Asia, South Asia, and internationally.
Adequate balance sheet and slightly overvalued.
