In This Article:
Deping Du is the CEO of Shandong Xinhua Pharmaceutical Company Limited (HKG:719). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Shandong Xinhua Pharmaceutical
How Does Deping Du's Compensation Compare With Similar Sized Companies?
Our data indicates that Shandong Xinhua Pharmaceutical Company Limited is worth HK$3.9b, and total annual CEO compensation was reported as CN¥1.0m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥930k. We examined companies with market caps from CN¥1.4b to CN¥5.7b, and discovered that the median CEO total compensation of that group was CN¥2.1m.
Most shareholders would consider it a positive that Deping Du takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Shandong Xinhua Pharmaceutical has changed from year to year.
Is Shandong Xinhua Pharmaceutical Company Limited Growing?
On average over the last three years, Shandong Xinhua Pharmaceutical Company Limited has grown earnings per share (EPS) by 27% each year (using a line of best fit). It achieved revenue growth of 17% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Shandong Xinhua Pharmaceutical Company Limited Been A Good Investment?
With a three year total loss of 14%, Shandong Xinhua Pharmaceutical Company Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
It appears that Shandong Xinhua Pharmaceutical Company Limited remunerates its CEO below most similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we don't think, Deping Du is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out. 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. So you may want to check if insiders are buying Shandong Xinhua Pharmaceutical shares with their own money (free access).