How Does Qinhuangdao Port's (HKG:3369) CEO Pay Compare With Company Performance?

Wensheng Yang became the CEO of Qinhuangdao Port Co., Ltd. (HKG:3369) in 2017, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Qinhuangdao Port.

View our latest analysis for Qinhuangdao Port

Comparing Qinhuangdao Port Co., Ltd.'s CEO Compensation With the industry

At the time of writing, our data shows that Qinhuangdao Port Co., Ltd. has a market capitalization of HK$16b, and reported total annual CEO compensation of CN¥903k for the year to December 2019. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at CN¥728.3k constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from HK$7.8b to HK$25b, we found that the median CEO total compensation was CN¥1.5m. In other words, Qinhuangdao Port pays its CEO lower than the industry median.

On an industry level, roughly 60% of total compensation represents salary and 40% is other remuneration. It's interesting to note that Qinhuangdao Port pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Qinhuangdao Port Co., Ltd.'s Growth Numbers

Over the last three years, Qinhuangdao Port Co., Ltd. has shrunk its earnings per share by 4.8% per year. It saw its revenue drop 4.3% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Qinhuangdao Port Co., Ltd. Been A Good Investment?

Given the total shareholder loss of 37% over three years, many shareholders in Qinhuangdao Port Co., Ltd. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Wensheng is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Qinhuangdao Port (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

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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