Sidong Wang became the CEO of China Taiping Insurance Holdings Company Limited (HKG:966) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for China Taiping Insurance Holdings.
Check out our latest analysis for China Taiping Insurance Holdings
Comparing China Taiping Insurance Holdings Company Limited's CEO Compensation With the industry
According to our data, China Taiping Insurance Holdings Company Limited has a market capitalization of HK$49b, and paid its CEO total annual compensation worth HK$853k over the year to December 2019. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$376k.
In comparison with other companies in the industry with market capitalizations ranging from HK$31b to HK$93b, the reported median CEO total compensation was HK$4.9m. Accordingly, China Taiping Insurance Holdings pays its CEO under the industry median.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | HK$376k | HK$369k | 44% |
| Other | HK$477k | HK$474k | 56% |
| Total Compensation | HK$853k | HK$843k | 100% |
Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. In China Taiping Insurance Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
China Taiping Insurance Holdings Company Limited's Growth
Over the past three years, China Taiping Insurance Holdings Company Limited has seen its earnings per share (EPS) grow by 24% per year. In the last year, its revenue is up 15%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 China Taiping Insurance Holdings Company Limited Been A Good Investment?
Given the total shareholder loss of 42% over three years, many shareholders in China Taiping Insurance Holdings Company Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we touched on above, China Taiping Insurance Holdings Company Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, the company has impressed with its earnings per share growth over three years. It's tough to criticize CEO compensation when the per-share earnings movement is positive. Shareholders, though, would ideally like to see shareholder returns head north before they agree to any 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 1 warning sign for China Taiping Insurance Holdings that you should be aware of before investing.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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