Key Things To Understand About Zhejiang Yongan Rongtong Holdings' (HKG:8211) CEO Pay Cheque

Lianfeng He has been the CEO of Zhejiang Yongan Rongtong Holdings Co., Ltd. (HKG:8211) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Zhejiang Yongan Rongtong Holdings

Comparing Zhejiang Yongan Rongtong Holdings Co., Ltd.'s CEO Compensation With the industry

Our data indicates that Zhejiang Yongan Rongtong Holdings Co., Ltd. has a market capitalization of HK$106m, and total annual CEO compensation was reported as CN¥541k for the year to December 2019. We note that's a decrease of 17% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥109k.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥2.0m. This suggests that Lianfeng He is paid below the industry median.

On an industry level, around 93% of total compensation represents salary and 7.4% is other remuneration. Zhejiang Yongan Rongtong Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Zhejiang Yongan Rongtong Holdings Co., Ltd.'s Growth

Zhejiang Yongan Rongtong Holdings Co., Ltd. has reduced its earnings per share by 108% a year over the last three years. It saw its revenue drop 39% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Zhejiang Yongan Rongtong Holdings Co., Ltd. Been A Good Investment?

Given the total shareholder loss of 58% over three years, many shareholders in Zhejiang Yongan Rongtong Holdings Co., Ltd. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Lianfeng is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. EPS growth has failed to impress us, and the same can be said about shareholder returns. It's tough to say that Lianfeng is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Zhejiang Yongan Rongtong Holdings you should be aware of, and 1 of them shouldn't be ignored.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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