In This Article:
Shu Gu became the CEO of Industrial and Commercial Bank of China Limited (HKG:1398) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Industrial and Commercial Bank of China
How Does Shu Gu's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Industrial and Commercial Bank of China Limited has a market cap of HK$2.1t, and is paying total annual CEO compensation of CN¥673k. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at CN¥546k. When we examined a group of companies with market caps over CN¥57b, we found that their median CEO total compensation was CN¥5.5m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
A first glance this seems like a real positive for shareholders, since Shu Gu is paid less than the average total compensation paid by other large companies. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Industrial and Commercial Bank of China has changed from year to year.
Is Industrial and Commercial Bank of China Limited Growing?
On average over the last three years, Industrial and Commercial Bank of China Limited has grown earnings per share (EPS) by 3.1% each year (using a line of best fit). Its revenue is up 4.2% over last year.
I'd prefer higher revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. You might want to check this free visual report on analyst forecasts for future earnings.
Has Industrial and Commercial Bank of China Limited Been A Good Investment?
With a total shareholder return of 30% over three years, Industrial and Commercial Bank of China Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Industrial and Commercial Bank of China Limited is currently paying its CEO below what is normal for large companies.