A Quick Analysis On China Aluminum Cans Holdings' (HKG:6898) CEO Salary

The CEO of China Aluminum Cans Holdings Limited (HKG:6898) is Wan Tsang Lin, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether China Aluminum Cans Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for China Aluminum Cans Holdings

Comparing China Aluminum Cans Holdings Limited's CEO Compensation With the industry

At the time of writing, our data shows that China Aluminum Cans Holdings Limited has a market capitalization of HK$433m, and reported total annual CEO compensation of HK$1.9m for the year to December 2019. Notably, that's an increase of 19% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$424k.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.2m. So it looks like China Aluminum Cans Holdings compensates Wan Tsang Lin in line with the median for the industry. Furthermore, Wan Tsang Lin directly owns HK$314m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 78% of total compensation represents salary and 22% is other remuneration. In China Aluminum Cans Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at China Aluminum Cans Holdings Limited's Growth Numbers

Over the last three years, China Aluminum Cans Holdings Limited has shrunk its earnings per share by 48% per year. In the last year, its revenue is down 25%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has China Aluminum Cans Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 34% over three years, China Aluminum Cans Holdings Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As we noted earlier, China Aluminum Cans Holdings pays its CEO in line with similar-sized companies belonging to the same industry. This doesn't look good when you see that EPS growth over the last three years has been negative. On the flip side, shareholder returns have been strong over the same time, which is certainly a positive sign. We're not saying CEO compensation is too generous, but shareholders might think performance needs to be improved before paying any more.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in China Aluminum Cans Holdings we think you should know about.

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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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