Should You Worry About Kingold Jewelry Inc’s (NASDAQ:KGJI) CEO Pay Check?

Zhihong Jia has been the CEO of Kingold Jewelry Inc (NASDAQ:KGJI) since 2009. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. 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.

See our latest analysis for Kingold Jewelry

How Does Zhihong Jia’s Compensation Compare With Similar Sized Companies?

Our data indicates that Kingold Jewelry Inc is worth US$60m, and total annual CEO compensation is US$175k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$288k.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Kingold Jewelry has changed from year to year.

NasdaqCM:KGJI CEO Compensation October 12th 18
NasdaqCM:KGJI CEO Compensation October 12th 18

Is Kingold Jewelry Inc Growing?

On average over the last three years, Kingold Jewelry Inc has grown earnings per share (EPS) by 26% each year. Its revenue is up 62% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.

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 Kingold Jewelry Inc Been A Good Investment?

Most shareholders would probably be pleased with Kingold Jewelry Inc for providing a total return of 79% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

It appears that Kingold Jewelry Inc remunerates its CEO below most similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. The pleasing shareholder returns are the cherry on top; you might even consider that Zhihong Jia deserves a raise!

Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Kingold Jewelry Inc (free visualization of insider trades).

Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.