Performances at China Dongxiang (Group) Co., Ltd. (HKG: 3818) has been reasonably good and CEO Zhiyong Zhang has done a decent job of leading the company in the right direction. This is something shareholders will keep in mind when voting on company resolutions such as executive compensation at the upcoming AGM on August 18, 2021. Based on our analysis of the data below. below, we think the CEO’s pay seems reasonable at the moment.
See our latest analysis for China Dongxiang (Group)
How does Zhiyong Zhang’s total compensation compare to other companies in the industry?
According to our data, China Dongxiang (Group) Co., Ltd. has a market capitalization of 6.3 billion Hong Kong dollars and paid its CEO a total annual compensation of 3.5 million CN in the year to March 2021. This is a notable increase of 11% last year. In particular, the salary which is CN ¥ 2.93m, represents the major part of the total remuneration paid.
Comparing similar companies in the same industry with market caps ranging from HK $ 3.1 billion to HK $ 12 billion, we found that the median total CEO compensation was CN 4.3 million. So it appears that China Dongxiang (Group) is compensating Zhiyong Zhang in line with the industry median. Additionally, Zhiyong Zhang owns HK $ 178 million in company stock in his own name, indicating that they have a lot of skin in the game.
|Making up||2021||2020||Proportion (2021)|
|Salary||CN ¥ 2.9m||CN ¥ 2.9m||84%|
|Other||CN ¥ 546k||CN ¥ 247k||16%|
|Total compensation||CN ¥ 3.5m||CN ¥ 3.1m||100%|
At the industry level, almost 91% of total compensation is salary, while the remainder 9% is other compensation. Although there is a difference in the way total compensation is set, China Dongxiang (Group) more or less reflects the market in terms of wage setting. If salary is the primary component of total compensation, this suggests that the CEO receives a higher fixed proportion of total compensation, regardless of performance.
A look at the growth figures of China Dongxiang (Group) Co., Ltd.
China Dongxiang (Group) Co., Ltd. has seen its earnings per share (EPS) increase by 32% per year over the past three years. It achieved 28% revenue growth over last year.
Shareholders would be happy to know that the company has improved over the past few years. Most shareholders would be delighted to see strong revenue growth combined with EPS growth. This combo suggests a rapidly growing business. Stepping away from the current shape for a second, it might be important to check out this free visual representation of what analysts expect for the future.
China Dongxiang (Group) Co., Ltd. was it a good investment?
China Dongxiang (Group) Co., Ltd. did not do too badly by its shareholders, with a total return of 6.2%, over three years. It would be nice to see this metric improve in the future. Therefore, a proposal to increase CEO compensation without seeing improved shareholder returns might not be welcomed by most shareholders.
Given that the overall performance of the company has been reasonable, the CEO compensation policy might not be the focus of shareholders at the next AGM. However, we still believe that any proposal to increase CEO compensation will be closely scrutinized to ensure that compensation is appropriate and tied to performance.
CEO compensation is an important area to watch, but we also need to pay attention to other attributes of the company. That’s why we did our research and identified 4 warning signs for China Dongxiang (Group) (2 of which are potentially serious!) that you need to know to have a comprehensive understanding of the stock.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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