Key Things To Understand About China New Higher Education Group's (HKG:2001) CEO Pay Cheque

Shuai Zhao became the CEO of China New Higher Education Group Limited (HKG:2001) 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for China New Higher Education Group

Comparing China New Higher Education Group Limited's CEO Compensation With the industry

According to our data, China New Higher Education Group Limited has a market capitalization of HK$8.7b, and paid its CEO total annual compensation worth CN¥1.1m over the year to August 2020. We note that's a decrease of 27% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥333k.

For comparison, other companies in the same industry with market capitalizations ranging between HK$3.1b and HK$12b had a median total CEO compensation of CN¥1.1m. So it looks like China New Higher Education Group compensates Shuai Zhao in line with the median for the industry. What's more, Shuai Zhao holds HK$388k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 9.2% is other remuneration. China New Higher Education Group 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 China New Higher Education Group Limited's Growth Numbers

China New Higher Education Group Limited's earnings per share (EPS) grew 5.1% per year over the last three years. It achieved revenue growth of 19% over the last year.

We would argue that the modest growth in revenue is a notable positive. And the improvement in EPSis modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has China New Higher Education Group Limited Been A Good Investment?

With a total shareholder return of 11% over three years, China New Higher Education Group Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As we noted earlier, China New Higher Education Group pays its CEO in line with similar-sized companies belonging to the same industry. But the company has failed to produce substantial growth in either EPS or total shareholder return. So, although the CEO compensation seems reasonable, shareholders might want to see some further progress before they agree that Shuai should get 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. In our study, we found 3 warning signs for China New Higher Education Group 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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