A Quick Analysis On Changmao Biochemical Engineering's (HKG:954) CEO Salary

Chun Pan is the CEO of Changmao Biochemical Engineering Company Limited (HKG:954), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Changmao Biochemical Engineering.

Check out our latest analysis for Changmao Biochemical Engineering

How Does Total Compensation For Chun Pan Compare With Other Companies In The Industry?

Our data indicates that Changmao Biochemical Engineering Company Limited has a market capitalization of HK$313m, and total annual CEO compensation was reported as CN¥1.2m for the year to December 2019. That's a notable increase of 39% on last year. We note that the salary portion, which stands at CN¥745.0k 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 CN¥1.2m. So it looks like Changmao Biochemical Engineering compensates Chun Pan in line with the median for the industry.

On an industry level, roughly 58% of total compensation represents salary and 42% is other remuneration. Although there is a difference in how total compensation is set, Changmao Biochemical Engineering more or less reflects the market in terms of setting the salary. 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.

Changmao Biochemical Engineering Company Limited's Growth

Changmao Biochemical Engineering Company Limited has seen its earnings per share (EPS) increase by 33% a year over the past three years. Its revenue is down 33% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Changmao Biochemical Engineering Company Limited Been A Good Investment?

With a three year total loss of 18% for the shareholders, Changmao Biochemical Engineering Company Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Chun is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Changmao Biochemical Engineering that you should be aware of before investing.

Switching gears from Changmao Biochemical Engineering, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

When trading Changmao Biochemical Engineering or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.