How Much Does China Starch Holdings' (HKG:3838) CEO Make?

The CEO of China Starch Holdings Limited (HKG:3838) is Shijun Gao, and this article examines 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.

See our latest analysis for China Starch Holdings

How Does Total Compensation For Shijun Gao Compare With Other Companies In The Industry?

At the time of writing, our data shows that China Starch Holdings Limited has a market capitalization of HK$779m, and reported total annual CEO compensation of CN¥525k for the year to December 2019. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at CN¥450.0k constitutes the majority of total compensation received by 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¥1.3m. In other words, China Starch Holdings pays its CEO lower than the industry median.

Speaking on an industry level, nearly 81% of total compensation represents salary, while the remainder of 19% is other remuneration. There isn't a significant difference between China Starch Holdings and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at China Starch Holdings Limited's Growth Numbers

Over the last three years, China Starch Holdings Limited has shrunk its earnings per share by 21% per year. Its revenue is up 39% over the last year.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has China Starch Holdings Limited Been A Good Investment?

Given the total shareholder loss of 46% over three years, many shareholders in China Starch Holdings Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, China Starch Holdings pays its CEO lower than the norm for similar-sized companies belonging to the same industry. But poor shareholder returns EPS growth have hampered the company over the past three years. In contrast, revenues have increased more recently. So, although Shijun is modestly paid, shareholders might want to see positive shareholder returns before warming to the idea of a raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for China Starch Holdings that investors should think about before committing capital to this stock.

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.

When trading China Starch Holdings or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.