Does Yangzhou Guangling District Taihe Rural Micro-finance's (HKG:1915) CEO Salary Compare Well With Industry Peers?

This article will reflect on the compensation paid to Li Bai who has served as CEO of Yangzhou Guangling District Taihe Rural Micro-finance Company Limited (HKG:1915) since 2013. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Yangzhou Guangling District Taihe Rural Micro-finance.

Check out our latest analysis for Yangzhou Guangling District Taihe Rural Micro-finance

How Does Total Compensation For Li Bai Compare With Other Companies In The Industry?

Our data indicates that Yangzhou Guangling District Taihe Rural Micro-finance Company Limited has a market capitalization of HK$972m, and total annual CEO compensation was reported as CN¥329k for the year to December 2019. We note that's an increase of 57% above last year. In particular, the salary of CN¥262.5k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥892k. That is to say, Li Bai is paid under the industry median. What's more, Li Bai holds HK$16m 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. Yangzhou Guangling District Taihe Rural Micro-finance is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Yangzhou Guangling District Taihe Rural Micro-finance Company Limited's Growth

Over the last three years, Yangzhou Guangling District Taihe Rural Micro-finance Company Limited has shrunk its earnings per share by 4.6% per year. Its revenue is down 44% over the previous year.

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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Yangzhou Guangling District Taihe Rural Micro-finance Company Limited Been A Good Investment?

Given the total shareholder loss of 50% over three years, many shareholders in Yangzhou Guangling District Taihe Rural Micro-finance Company Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, Yangzhou Guangling District Taihe Rural Micro-finance Company Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Yangzhou Guangling District Taihe Rural Micro-finance that investors should look into moving forward.

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