Michael Siu has been the CEO of Beijing Properties (Holdings) Limited (HKG:925) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Beijing Properties (Holdings) pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Beijing Properties (Holdings)
Comparing Beijing Properties (Holdings) Limited's CEO Compensation With the industry
According to our data, Beijing Properties (Holdings) Limited has a market capitalization of HK$697m, and paid its CEO total annual compensation worth HK$1.6m over the year to December 2019. Notably, that's an increase of 75% over the year before. We note that the salary portion, which stands at HK$1.42m constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.8m. This suggests that Beijing Properties (Holdings) remunerates its CEO largely in line with the industry average.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | HK$1.4m | HK$727k | 87% |
| Other | HK$205k | HK$199k | 13% |
| Total Compensation | HK$1.6m | HK$926k | 100% |
Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. Beijing Properties (Holdings) is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Beijing Properties (Holdings) Limited's Growth Numbers
Over the last three years, Beijing Properties (Holdings) Limited has shrunk its earnings per share by 116% per year. It achieved revenue growth of 7.8% over the last year.
The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Beijing Properties (Holdings) Limited Been A Good Investment?
Since shareholders would have lost about 69% over three years, some Beijing Properties (Holdings) Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As previously discussed, Michael is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over 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 pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Beijing Properties (Holdings) you should be aware of, and 2 of them are significant.
Important note: Beijing Properties (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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About SEHK:925
Beijing Properties (Holdings)
An investment holding company, engages in the real estate business in Mainland China.
Excellent balance sheet and good value.
