How Does Greenland Hong Kong Holdings' (HKG:337) CEO Salary Compare to Peers?

Jun Chen has been the CEO of Greenland Hong Kong Holdings Limited (HKG:337) since 2013, 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 Greenland Hong Kong Holdings.

See our latest analysis for Greenland Hong Kong Holdings

How Does Total Compensation For Jun Chen Compare With Other Companies In The Industry?

According to our data, Greenland Hong Kong Holdings Limited has a market capitalization of HK$6.2b, and paid its CEO total annual compensation worth CN¥6.2m over the year to December 2019. That's a notable decrease of 10% on last year. In particular, the salary of CN¥4.17m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between HK$3.1b and HK$12b had a median total CEO compensation of CN¥4.5m. This suggests that Jun Chen is paid more than the median for the industry. What's more, Jun Chen holds HK$7.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. Although there is a difference in how total compensation is set, Greenland Hong Kong Holdings 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.

Greenland Hong Kong Holdings Limited's Growth

Over the past three years, Greenland Hong Kong Holdings Limited has seen its earnings per share (EPS) grow by 27% per year. In the last year, its revenue is up 14%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Greenland Hong Kong Holdings Limited Been A Good Investment?

Since shareholders would have lost about 13% over three years, some Greenland Hong Kong Holdings Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, Greenland Hong Kong Holdings Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the EPS growth is certainly impressive, but it's disappointing to see negative shareholder returns over the same period. Considering overall performance, we can't say Jun is underpaid, in fact compensation is definitely on the higher side.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Greenland Hong Kong Holdings (1 is a bit unpleasant!) that you should be aware of before investing here.

Important note: Greenland Hong Kong Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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