Linan Zhu is the CEO of Legend Holdings Corporation (HKG:3396). 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Legend Holdings

How Does Linan Zhu’s Compensation Compare With Similar Sized Companies?

Our data indicates that Legend Holdings Corporation is worth HK$51b, and total annual CEO compensation is CN¥31m. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at CN¥14m. When we examined a selection of companies with market caps ranging from CN¥27b to CN¥81b, we found the median CEO total compensation was CN¥2.7m.

Thus we can conclude that Linan Zhu receives more in total compensation than the median of a group of companies in the same market, and of similar size to Legend Holdings Corporation. 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 Legend Holdings, below.

Is Legend Holdings Corporation Growing?

Legend Holdings Corporation has reduced its earnings per share by an average of 5.1% a year, over the last three years (measured with a line of best fit). Its revenue is up 7.9% over last year.

Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has Legend Holdings Corporation Been A Good Investment?

With a total shareholder return of 19% over three years, Legend Holdings Corporation shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

We examined the amount Legend Holdings Corporation pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

And while shareholder returns have been respectable, they have hardly been superb. So you may want to delve deeper, because we don’t think the CEO pay is too low. So you may want to check if insiders are buying Legend Holdings shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.