How Should Investors React To Shougang Concord Century Holdings' (HKG:103) CEO Pay?

This article will reflect on the compensation paid to Fanrong Su who has served as CEO of Shougang Concord Century Holdings Limited (HKG:103) since 2018. 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 Shougang Concord Century Holdings

How Does Total Compensation For Fanrong Su Compare With Other Companies In The Industry?

Our data indicates that Shougang Concord Century Holdings Limited has a market capitalization of HK$406m, and total annual CEO compensation was reported as HK$2.3m for the year to December 2019. We note that's an increase of 22% above last year. We note that the salary portion, which stands at HK$2.22m 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 HK$1.1m. Accordingly, our analysis reveals that Shougang Concord Century Holdings Limited pays Fanrong Su north of the industry median.

Speaking on an industry level, nearly 86% of total compensation represents salary, while the remainder of 14% is other remuneration. Investors will find it interesting that Shougang Concord Century Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. 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.

Shougang Concord Century Holdings Limited's Growth

Shougang Concord Century Holdings Limited has seen its earnings per share (EPS) increase by 10% a year over the past three years. Its revenue is down 8.1% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Shougang Concord Century Holdings Limited Been A Good Investment?

Since shareholders would have lost about 4.8% over three years, some Shougang Concord Century Holdings Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Shougang Concord Century Holdings pays its CEO a majority of compensation through a salary. As previously discussed, Fanrong is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth is certainly impressive, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Considering overall performance, we can't say Fanrong is underpaid, in fact compensation is definitely on the higher side.

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 3 warning signs for Shougang Concord Century 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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