The CEO of Jilin Province Huinan Changlong Bio-pharmacy Company Limited (HKG:8049) is Hong Zhang, and this article examines 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 Jilin Province Huinan Changlong Bio-pharmacy.
Comparing Jilin Province Huinan Changlong Bio-pharmacy Company Limited's CEO Compensation With the industry
At the time of writing, our data shows that Jilin Province Huinan Changlong Bio-pharmacy Company Limited has a market capitalization of HK$751m, and reported total annual CEO compensation of CN¥526k for the year to December 2019. That's a notable decrease of 56% on last year. In particular, the salary of CN¥278.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥3.4m. Accordingly, Jilin Province Huinan Changlong Bio-pharmacy pays its CEO under the industry median. Moreover, Hong Zhang also holds HK$137m worth of Jilin Province Huinan Changlong Bio-pharmacy stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Speaking on an industry level, nearly 59% of total compensation represents salary, while the remainder of 41% is other remuneration. In Jilin Province Huinan Changlong Bio-pharmacy's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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 Jilin Province Huinan Changlong Bio-pharmacy Company Limited's Growth Numbers
Jilin Province Huinan Changlong Bio-pharmacy Company Limited has reduced its earnings per share by 1.5% a year over the last three years. Its revenue is down 3.5% over the previous year.
The lack of EPS growth is certainly unimpressive. And the impression is worse when you consider revenue is down year-on-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 Jilin Province Huinan Changlong Bio-pharmacy Company Limited Been A Good Investment?
Since shareholders would have lost about 1.5% over three years, some Jilin Province Huinan Changlong Bio-pharmacy Company Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As we touched on above, Jilin Province Huinan Changlong Bio-pharmacy Company Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Jilin Province Huinan Changlong Bio-pharmacy that investors should be aware of in a dynamic business environment.
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.
When trading Jilin Province Huinan Changlong Bio-pharmacy 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.
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 firstname.lastname@example.org.