What Can We Conclude About Uni-President China Holdings' (HKG:220) CEO Pay?

This article will reflect on the compensation paid to Xinhua Liu who has served as CEO of Uni-President China Holdings Ltd (HKG:220) since 2016. 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 Uni-President China Holdings

Comparing Uni-President China Holdings Ltd's CEO Compensation With the industry

Our data indicates that Uni-President China Holdings Ltd has a market capitalization of HK$31b, and total annual CEO compensation was reported as CN¥3.9m for the year to December 2019. That's a fairly small increase of 7.8% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥1.3m.

On comparing similar companies from the same industry with market caps ranging from HK$16b to HK$50b, we found that the median CEO total compensation was CN¥5.8m. Accordingly, Uni-President China Holdings pays its CEO under the industry median.

Speaking on an industry level, nearly 81% of total compensation represents salary, while the remainder of 19% is other remuneration. Uni-President China Holdings 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.

Uni-President China Holdings Ltd's Growth

Uni-President China Holdings Ltd's earnings per share (EPS) grew 53% per year over the last three years. It achieved revenue growth of 1.6% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Uni-President China Holdings Ltd Been A Good Investment?

Uni-President China Holdings Ltd has served shareholders reasonably well, with a total return of 31% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

As we touched on above, Uni-President China Holdings Ltd is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, EPS growth has been rock solid for the past three years. Shareholder returns, in comparison, have not been as impressive. Shareholder returns could be better but we're pleased with the positive EPS growth. So considering these factors, we think Xinhua is modestly compensated.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Uni-President China Holdings that you should be aware of before investing.

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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