Why Huanxi Media Group Limited’s (HKG:1003) CEO Pay Matters To You

Steven Xiang has been the CEO of Huanxi Media Group Limited (HKG:1003) since 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Huanxi Media Group

How Does Steven Xiang’s Compensation Compare With Similar Sized Companies?

According to our data, Huanxi Media Group Limited has a market capitalization of HK$4.4b, and paid its CEO total annual compensation worth HK$41m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at HK$12m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from HK$1.6b to HK$6.3b, and the median CEO total compensation was HK$2.4m.

It would therefore appear that Huanxi Media Group Limited pays Steven Xiang more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. Although we don’t have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

The graphic below shows how CEO compensation at Huanxi Media Group has changed from year to year.

SEHK:1003 CEO Compensation, October 23rd 2019
SEHK:1003 CEO Compensation, October 23rd 2019

Is Huanxi Media Group Limited Growing?

Huanxi Media Group Limited has increased its earnings per share (EPS) by an average of 71% a year, over the last three years (using a line of best fit). Its revenue is up 739% over last year.

This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business.

Has Huanxi Media Group Limited Been A Good Investment?

With a three year total loss of 40%, Huanxi Media Group Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared total CEO remuneration at Huanxi Media Group Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Huanxi Media Group (free visualization of insider trades).

If you want to buy a stock that is better than Huanxi Media Group, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.