What We Learned About China Golden Classic Group's (HKG:8281) CEO Pay

The CEO of China Golden Classic Group Limited (HKG:8281) is Tong Xing, 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.

View our latest analysis for China Golden Classic Group

Comparing China Golden Classic Group Limited's CEO Compensation With the industry

At the time of writing, our data shows that China Golden Classic Group Limited has a market capitalization of HK$260m, and reported total annual CEO compensation of CN¥332k for the year to December 2019. That is, the compensation was roughly the same as last year. Notably, the salary which is CN¥268.0k, 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¥1.6m. In other words, China Golden Classic Group pays its CEO lower than the industry median. Furthermore, Tong Xing directly owns HK$28m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. There isn't a significant difference between China Golden Classic Group and the broader market, in terms of salary allocation in the overall compensation package. 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.

China Golden Classic Group Limited's Growth

China Golden Classic Group Limited has seen its earnings per share (EPS) increase by 212% a year over the past three years. Its revenue is up 1.1% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has China Golden Classic Group Limited Been A Good Investment?

Given the total shareholder loss of 13% over three years, many shareholders in China Golden Classic Group 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 Golden Classic Group pays its CEO lower than the norm for similar-sized companies belonging to the same industry. However we must not forget that the EPS growth has been very strong over three years. Considering EPS are on the up, we would say Tong is compensated fairly. Shareholders, though, would ideally like to see shareholder returns head north before they agree to any raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for China Golden Classic Group you should be aware of, and 1 of them is a bit unpleasant.

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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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