In 2011 Yongli Zhang was appointed CEO of China Outfitters Holdings Limited (HKG:1146). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for China Outfitters Holdings

How Does Yongli Zhang's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that China Outfitters Holdings Limited has a market cap of HK$620m, and reported total annual CEO compensation of CN¥3.1m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CN¥2.5m. We looked at a group of companies with market capitalizations under CN¥1.4b, and the median CEO total compensation was CN¥1.5m.

Thus we can conclude that Yongli Zhang receives more in total compensation than the median of a group of companies in the same market, and of similar size to China Outfitters Holdings Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at China Outfitters Holdings, below.

Is China Outfitters Holdings Limited Growing?

On average over the last three years, China Outfitters Holdings Limited has shrunk earnings per share by 1.6% each year (measured with a line of best fit). Its revenue is down 6.9% over last year.

The lack of earnings per share growth in the last three years is unimpressive. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has China Outfitters Holdings Limited Been A Good Investment?

Since shareholders would have lost about 55% over three years, some China Outfitters Holdings Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared the total CEO remuneration paid by China Outfitters Holdings Limited, and compared it to remuneration at a group of 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. Over the same period, investors would have come away with nothing in the way of share price gains. This analysis suggests to us that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling China Outfitters Holdings shares (free trial).

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.