How Should Investors Feel About Greatview Aseptic Packaging's (HKG:468) CEO Remuneration?

Jeff Bi became the CEO of Greatview Aseptic Packaging Company Limited (HKG:468) in 2003, 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 Greatview Aseptic Packaging.

See our latest analysis for Greatview Aseptic Packaging

Comparing Greatview Aseptic Packaging Company Limited's CEO Compensation With the industry

At the time of writing, our data shows that Greatview Aseptic Packaging Company Limited has a market capitalization of HK$5.2b, and reported total annual CEO compensation of CN¥3.5m for the year to December 2019. That's a fairly small increase of 5.9% over the previous year. Notably, the salary which is CN¥2.63m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from HK$3.1b to HK$12b, the reported median CEO total compensation was CN¥3.5m. From this we gather that Jeff Bi is paid around the median for CEOs in the industry.

Talking in terms of the industry, salary represented approximately 78% of total compensation out of all the companies we analyzed, while other remuneration made up 22% of the pie. There isn't a significant difference between Greatview Aseptic Packaging and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Greatview Aseptic Packaging Company Limited's Growth Numbers

Greatview Aseptic Packaging Company Limited has reduced its earnings per share by 1.8% a year over the last three years. Its revenue is up 17% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Greatview Aseptic Packaging Company Limited Been A Good Investment?

Given the total shareholder loss of 12% over three years, many shareholders in Greatview Aseptic Packaging Company Limited 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, Greatview Aseptic Packaging pays its CEO in line with similar-sized companies belonging to the same industry. However, revenues have increased over the past year, a positive sign for the company. In contrast, over the same time span, shareholder returns are negative. EPS growth is bleak as well, adding fuel to the fire. We'd say CEO compensation isn't unfair, but shareholders may be wary of a bump in pay before the company substantially improves overall performance.

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 Greatview Aseptic Packaging that investors should think about before committing capital to this stock.

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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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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