Is Want Want China Holdings Limited’s (HKG:151) CEO Paid Enough Relative To Peers?
Eng-Meng Tsai is the CEO of Want Want China Holdings Limited (HKG:151). This analysis aims first to contrast CEO compensation with other large companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Eng-Meng Tsai’s Compensation Compare With Similar Sized Companies?
Our data indicates that Want Want China Holdings Limited is worth HK$81b, and total annual CEO compensation is CN¥35m. (This figure is for the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at CN¥1.2m. When we examined a group of companies with market caps over CN¥54b, we found that their median CEO total compensation was CN¥3.1m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Thus we can conclude that Eng-Meng Tsai receives more in total compensation than the median of a group of large companies in the same market as Want Want China Holdings 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 a visual representation of the CEO compensation at Want Want China Holdings, below.
Is Want Want China Holdings Limited Growing?
On average over the last three years, Want Want China Holdings Limited has shrunk earnings per share by 1.9% each year (measured with a line of best fit). In the last year, its revenue is up 3.2%.
The lack of earnings per share growth in the last three years is unimpressive. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Want Want China Holdings Limited Been A Good Investment?
Want Want China Holdings Limited has served shareholders reasonably well, with a total return of 30% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
In Summary…
We compared total CEO remuneration at Want Want China Holdings Limited with the amount paid at other large companies. As discussed above, we discovered that the company pays more than the median of that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
While shareholder returns are acceptable, they don’t delight. So we doubt many shareholders would consider the CEO pay to be particularly modest! So you may want to check if insiders are buying Want Want China Holdings shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
