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Feng Luming became the CEO of Hailiang International Holdings Limited (HKG:2336) in 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Hailiang International Holdings
How Does Feng Luming's Compensation Compare With Similar Sized Companies?
According to our data, Hailiang International Holdings Limited has a market capitalization of HK$563m, and paid its CEO total annual compensation worth HK$556k over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$520k. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO total compensation in that group is HK$1.8m.
A first glance this seems like a real positive for shareholders, since Feng Luming is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Hailiang International Holdings has changed over time.
Is Hailiang International Holdings Limited Growing?
On average over the last three years, Hailiang International Holdings Limited has grown earnings per share (EPS) by 65% each year (using a line of best fit). Its revenue is up 29% over last year.
This demonstrates that the company has been improving recently. A good result. 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 Hailiang International Holdings Limited Been A Good Investment?
Given the total loss of 36% over three years, many shareholders in Hailiang International Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Hailiang International Holdings Limited is currently paying its CEO below what is normal for companies of its size.
Since the business is growing, many would argue this suggests the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we would not say that Feng Luming is generously paid, it would be good to see an improvement in business performance before too an increase in pay. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Hailiang International Holdings.