How Should Investors Feel About COFCO Joycome Foods' (HKG:1610) CEO Remuneration?

Jianong Xu has been the CEO of COFCO Joycome Foods Limited (HKG:1610) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for COFCO Joycome Foods.

See our latest analysis for COFCO Joycome Foods

Comparing COFCO Joycome Foods Limited's CEO Compensation With the industry

According to our data, COFCO Joycome Foods Limited has a market capitalization of HK$10b, and paid its CEO total annual compensation worth CN¥1.6m over the year to December 2019. That's a notable decrease of 57% on last year. Notably, the salary which is CN¥794.0k, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between HK$7.8b and HK$25b had a median total CEO compensation of CN¥3.7m. This suggests that Jianong Xu is paid below the industry median. Furthermore, Jianong Xu directly owns HK$1.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 81% of total compensation out of all the companies we analyzed, while other remuneration made up 19% of the pie. COFCO Joycome Foods pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at COFCO Joycome Foods Limited's Growth Numbers

Over the past three years, COFCO Joycome Foods Limited has seen its earnings per share (EPS) grow by 91% per year. Its revenue is up 90% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 COFCO Joycome Foods Limited Been A Good Investment?

Most shareholders would probably be pleased with COFCO Joycome Foods Limited for providing a total return of 77% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

As previously discussed, Jianong is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Since EPS growth is heading in a positive direction; many would agree with our assessment that the pay is modest. Plus, we can't ignore the impressive shareholder returns, and won't be surprised if some shareholders were to reward such excellent all-around performance with a raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 5 warning signs for COFCO Joycome Foods (3 are potentially serious!) that you should be aware of before investing here.

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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