Does China Ting Group Holdings' (HKG:3398) CEO Salary Compare Well With The Performance Of The Company?

Hung Yi Ting is the CEO of China Ting Group Holdings Limited (HKG:3398), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether China Ting Group Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for China Ting Group Holdings

Comparing China Ting Group Holdings Limited's CEO Compensation With the industry

According to our data, China Ting Group Holdings Limited has a market capitalization of HK$693m, and paid its CEO total annual compensation worth HK$3.0m over the year to December 2019. This means that the compensation hasn't changed much from last year. Notably, the salary which is HK$3.00m, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.4m. So it looks like China Ting Group Holdings compensates Hung Yi Ting in line with the median for the industry.

Speaking on an industry level, nearly 93% of total compensation represents salary, while the remainder of 7.4% is other remuneration. China Ting Group Holdings has gone down a largely traditional route, paying Hung Yi Ting a high salary, giving it preference over non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

China Ting Group Holdings Limited's Growth

China Ting Group Holdings Limited has reduced its earnings per share by 95% a year over the last three years. In the last year, its revenue is down 18%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has China Ting Group Holdings Limited Been A Good Investment?

Since shareholders would have lost about 20% over three years, some China Ting Group Holdings Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Hung Yi receives almost all of their compensation through a salary. As we touched on above, China Ting Group Holdings Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for China Ting Group Holdings that investors should look into moving forward.

Important note: China Ting Group 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.

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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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