How Does Great China Properties Holdings' (HKG:21) CEO Pay Compare With Company Performance?

Wenxi Huang has been the CEO of Great China Properties Holdings Limited (HKG:21) since 2007, and this article will examine the executive's compensation 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 Great China Properties Holdings.

Check out our latest analysis for Great China Properties Holdings

Comparing Great China Properties Holdings Limited's CEO Compensation With the industry

According to our data, Great China Properties Holdings Limited has a market capitalization of HK$318m, and paid its CEO total annual compensation worth HK$1.0m over the year to December 2019. That's a notable decrease of 24% on last year. Notably, the salary which is HK$834.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.6m. In other words, Great China Properties Holdings pays its CEO lower than the industry median. Moreover, Wenxi Huang also holds HK$51m worth of Great China Properties Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. Great China Properties Holdings pays out 83% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Great China Properties Holdings Limited's Growth Numbers

Great China Properties Holdings Limited has seen its earnings per share (EPS) increase by 85% a year over the past three years. It saw its revenue drop 76% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Great China Properties Holdings Limited Been A Good Investment?

Given the total shareholder loss of 58% over three years, many shareholders in Great China Properties Holdings Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, Great China Properties Holdings pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Importantly though, the company has impressed with its EPS growth over three years. Considering EPS are on the up, we would say Wenxi is compensated fairly. But shareholders will likely want to hold off on any raise for Wenxi until investor returns are positive.

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 did our research and spotted 3 warning signs for Great China Properties Holdings that investors should look into moving forward.

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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