Min Zhou became the CEO of Beijing Enterprises Water Group Limited (HKG:371) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Min Zhou’s Compensation Compare With Similar Sized Companies?
Our data indicates that Beijing Enterprises Water Group Limited is worth HK$47b, and total annual CEO compensation is HK$11m. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at HK$7.4m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$31b to HK$94b. The median total CEO compensation was HK$3.0m.
Thus we can conclude that Min Zhou receives more in total compensation than the median of a group of companies in the same market, and of similar size to Beijing Enterprises Water Group Limited. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Beijing Enterprises Water Group has changed over time.
Is Beijing Enterprises Water Group Limited Growing?
On average over the last three years, Beijing Enterprises Water Group Limited has grown earnings per share (EPS) by 19% each year (using a line of best fit). It achieved revenue growth of 18% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Beijing Enterprises Water Group Limited Been A Good Investment?
With a total shareholder return of 14% over three years, Beijing Enterprises Water Group Limited shareholders would, in general, be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared total CEO remuneration at Beijing Enterprises Water Group Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. We also think investors are doing ok, over the same time period. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we’d recommend further research on management. So you may want to check if insiders are buying Beijing Enterprises Water Group shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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