- Hong Kong
- /
- Healthcare Services
- /
- SEHK:3689
Key Things To Understand About Guangdong Kanghua Healthcare's (HKG:3689) CEO Pay Cheque
The CEO of Guangdong Kanghua Healthcare Co., Ltd. (HKG:3689) is Wangzhi Chen, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Guangdong Kanghua Healthcare pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Guangdong Kanghua Healthcare
How Does Total Compensation For Wangzhi Chen Compare With Other Companies In The Industry?
Our data indicates that Guangdong Kanghua Healthcare Co., Ltd. has a market capitalization of HK$1.1b, and total annual CEO compensation was reported as CN„2.0m for the year to December 2019. Notably, that's a decrease of 10% over the year before. Notably, the salary which is CN„1.59m, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN„1.7m. So it looks like Guangdong Kanghua Healthcare compensates Wangzhi Chen in line with the median for the industry.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CN„1.6m | CN„1.8m | 80% |
| Other | CN„385k | CN„385k | 20% |
| Total Compensation | CN„2.0m | CN„2.2m | 100% |
On an industry level, around 91% of total compensation represents salary and 9.4% is other remuneration. Guangdong Kanghua Healthcare pays a modest slice of remuneration through salary, as compared to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Guangdong Kanghua Healthcare Co., Ltd.'s Growth Numbers
Over the last three years, Guangdong Kanghua Healthcare Co., Ltd. has shrunk its earnings per share by 48% per year. In the last year, its revenue changed by just 0.8%.
Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Guangdong Kanghua Healthcare Co., Ltd. Been A Good Investment?
Given the total shareholder loss of 70% over three years, many shareholders in Guangdong Kanghua Healthcare Co., Ltd. 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 noted earlier, Guangdong Kanghua Healthcare pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Guangdong Kanghua Healthcare (1 shouldn't be ignored!) that you should be aware of before investing here.
Important note: Guangdong Kanghua Healthcare is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
If youâre looking to trade Guangdong Kanghua Healthcare, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
New: Manage All Your Stock Portfolios in One Place
We've created the ultimate portfolio companion for stock investors, and it's free.
âą Connect an unlimited number of Portfolios and see your total in one currency
âą Be alerted to new Warning Signs or Risks via email or mobile
âą Track the Fair Value of your stocks
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.
About SEHK:3689
Guangdong Kanghua Healthcare Group
An investment holding company, primarily operates private hospitals in the Peopleâs Republic of China.
Excellent balance sheet and fair value.
