Danyun Chen became the CEO of Fujian Holdings Limited (HKG:181) in 2015, 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 assess whether Fujian Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Fujian Holdings Limited's CEO Compensation With the industry
Our data indicates that Fujian Holdings Limited has a market capitalization of HK$194m, and total annual CEO compensation was reported as HK$650k for the year to December 2019. That's a notable decrease of 8.5% on last year. Notably, the salary of HK$650k is the entirety of the CEO compensation.
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$2.1m. In other words, Fujian Holdings pays its CEO lower than the industry median.
Talking in terms of the industry, salary represented approximately 87% of total compensation out of all the companies we analyzed, while other remuneration made up 13% of the pie. Speaking on a company level, Fujian Holdings prefers to tread along a traditional path, disbursing all compensation through a salary. 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.
A Look at Fujian Holdings Limited's Growth Numbers
Fujian Holdings Limited has seen its earnings per share (EPS) increase by 2.6% a year over the past three years. It saw its revenue drop 25% over the last year.
We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPSgrowth gives us some relief. 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. 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 Fujian Holdings Limited Been A Good Investment?
With a three year total loss of 52% for the shareholders, Fujian Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
Fujian Holdings pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we touched on above, Fujian 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. But the EPS growth is lacking, just like the returns (over three years). So while we would not say that Danyun is generously paid, it would be good to see an improvement in business performance before there is talk about a raise.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Fujian Holdings that investors should think about before committing capital to this stock.
Switching gears from Fujian Holdings, 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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