In 2014 Jiakun Wei was appointed CEO of Weiqiao Textile Company Limited (HKG:2698). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Weiqiao Textile
How Does Jiakun Wei’s Compensation Compare With Similar Sized Companies?
According to our data, Weiqiao Textile Company Limited has a market capitalization of HK$3.0b, and pays its CEO total annual compensation worth CN¥701k. (This figure is for the year to 2017). It is worth noting that the CEO compensation consists almost entirely of the salary, worth CN¥684k. When we examined a selection of companies with market caps ranging from CN¥1.4b to CN¥5.5b, we found the median CEO compensation was CN¥2.0m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Weiqiao Textile has changed from year to year.
Is Weiqiao Textile Company Limited Growing?
On average over the last three years, Weiqiao Textile Company Limited has shrunk earnings per share by 8.1% each year. It saw its revenue drop -2.8% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Weiqiao Textile Company Limited Been A Good Investment?
With a three year total loss of 1.6%, Weiqiao Textile 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 Weiqiao Textile Company Limited remunerates its CEO below most similar sized companies.
Jiakun Wei is paid less than CEOs of similar size companies, but the company isn’t growing and total shareholder returns have been disappointing. While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Weiqiao Textile.