Key Things To Understand About China Huirong Financial Holdings' (HKG:1290) CEO Pay Cheque

The CEO of China Huirong Financial Holdings Limited (HKG:1290) is Min Wu, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for China Huirong Financial Holdings.

View our latest analysis for China Huirong Financial Holdings

Comparing China Huirong Financial Holdings Limited's CEO Compensation With the industry

According to our data, China Huirong Financial Holdings Limited has a market capitalization of HK$620m, and paid its CEO total annual compensation worth CN¥1.5m over the year to December 2019. Notably, that's a decrease of 11% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥761k.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥941k. This suggests that Min Wu is paid more than the median for the industry. What's more, Min Wu holds HK$1.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the broader industry, salary and other compensation roughly make up 50% each, of the total compensation. Although there is a difference in how total compensation is set, China Huirong Financial Holdings more or less reflects the market in terms of setting the salary. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

China Huirong Financial Holdings Limited's Growth

Over the last three years, China Huirong Financial Holdings Limited has shrunk its earnings per share by 31% per year. Its revenue is down 26% over the previous year.

Few shareholders would be pleased to read that EPS have declined. 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. 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 China Huirong Financial Holdings Limited Been A Good Investment?

Given the total shareholder loss of 49% over three years, many shareholders in China Huirong Financial Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we touched on above, China Huirong Financial Holdings Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. What's equally worrying is that the company isn't growing by our analysis. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 5 warning signs for China Huirong Financial Holdings (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

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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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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