How Should Investors Feel About Yida China Holdings' (HKG:3639) CEO Remuneration?

Xiuwen Jiang became the CEO of Yida China Holdings Limited (HKG:3639) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Yida China Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Yida China Holdings

How Does Total Compensation For Xiuwen Jiang Compare With Other Companies In The Industry?

At the time of writing, our data shows that Yida China Holdings Limited has a market capitalization of HK$5.6b, and reported total annual CEO compensation of CN¥5.0m for the year to December 2019. We note that's an increase of 25% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥1.8m.

In comparison with other companies in the industry with market capitalizations ranging from HK$3.1b to HK$12b, the reported median CEO total compensation was CN¥4.0m. This suggests that Yida China Holdings remunerates its CEO largely in line with the industry average.

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. Yida China Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Yida China Holdings Limited's Growth

Yida China Holdings Limited has reduced its earnings per share by 3.1% a year over the last three years. In the last year, its revenue is down 28%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Yida China Holdings Limited Been A Good Investment?

Since shareholders would have lost about 14% over three years, some Yida China 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 noted earlier, Yida China Holdings pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Yida China Holdings (2 make us uncomfortable!) that you should be aware of before investing here.

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.

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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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