How Should Investors React To Xiangxing International Holding's (HKG:1732) CEO Pay?

Changwu Qiu has been the CEO of Xiangxing International Holding Limited (HKG:1732) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Xiangxing International Holding pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Xiangxing International Holding

Comparing Xiangxing International Holding Limited's CEO Compensation With the industry

At the time of writing, our data shows that Xiangxing International Holding Limited has a market capitalization of HK$150m, and reported total annual CEO compensation of CN¥682k for the year to December 2019. That's just a smallish increase of 4.1% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥125k.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.3m. Accordingly, Xiangxing International Holding pays its CEO under the industry median.

On an industry level, around 85% of total compensation represents salary and 15% is other remuneration. In Xiangxing International Holding's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Xiangxing International Holding Limited's Growth Numbers

Xiangxing International Holding Limited has seen its earnings per share (EPS) increase by 6.8% a year over the past three years. Its revenue is down 55% over the previous year.

We generally like to see a little revenue growth, but the modest EPSgrowth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Xiangxing International Holding Limited Been A Good Investment?

With a three year total loss of 59% for the shareholders, Xiangxing International Holding Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Xiangxing International Holding Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company isn't growing and total shareholder returns have been disappointing. So while we don't think, Changwu is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Xiangxing International Holding that you should be aware of before investing.

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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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