A Look At Beijing Enterprises Holdings' (HKG:392) CEO Remuneration

Zibo Hou has been the CEO of Beijing Enterprises Holdings Limited (HKG:392) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Beijing Enterprises Holdings.

Check out our latest analysis for Beijing Enterprises Holdings

Comparing Beijing Enterprises Holdings Limited's CEO Compensation With the industry

According to our data, Beijing Enterprises Holdings Limited has a market capitalization of HK$32b, and paid its CEO total annual compensation worth HK$1.8m over the year to December 2019. We note that's a decrease of 59% compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$1.8m.

On examining similar-sized companies in the industry with market capitalizations between HK$16b and HK$50b, we discovered that the median CEO total compensation of that group was HK$1.5m. This suggests that Beijing Enterprises Holdings remunerates its CEO largely in line with the industry average.

On an industry level, total compensation is equally proportioned between salary and other compensation, that is, they each represent approximately 50% of the total compensation. At the company level, Beijing Enterprises Holdings pays Zibo Hou solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Beijing Enterprises Holdings Limited's Growth

Beijing Enterprises Holdings Limited has seen its earnings per share (EPS) increase by 1.4% a year over the past three years. It saw its revenue drop 3.1% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Beijing Enterprises Holdings Limited Been A Good Investment?

Since shareholders would have lost about 37% over three years, some Beijing Enterprises Holdings Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Beijing Enterprises Holdings rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we touched on above, Beijing Enterprises Holdings Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, Beijing Enterprises Holdings is suffering from adverse shareholder returns and althoughEPS have grown over the past three years, they have not been extraordinary. Although we wouldn't say CEO compensation is exceptionally high, it isn't very low either. Shareholders might want to see substantial improvements in returns before agreeing that Zibo deserves a raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Beijing Enterprises Holdings that investors should look into moving forward.

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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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