Ping Zheng is the CEO of Shuanghua Holdings Limited (HKG:1241). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

Check out our latest analysis for Shuanghua Holdings

How Does Ping Zheng's Compensation Compare With Similar Sized Companies?

Our data indicates that Shuanghua Holdings Limited is worth HK$30m, and total annual CEO compensation was reported as CN¥1.1m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥1.0m. We looked at a group of companies with market capitalizations under CN¥1.4b, and the median CEO total compensation was CN¥1.6m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Shuanghua Holdings. On an industry level, roughly 71% of total compensation represents salary and 29% is other remuneration. Shuanghua Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion. You can see, below, how CEO compensation at Shuanghua Holdings has changed over time.

Is Shuanghua Holdings Limited Growing?

Shuanghua Holdings Limited has reduced its earnings per share by an average of 17% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 48%.

Sadly for shareholders, earnings per share are actually down, 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 Shuanghua Holdings Limited Been A Good Investment?

Since shareholders would have lost about 92% over three years, some Shuanghua Holdings Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

It looks like Shuanghua Holdings Limited pays its CEO less than similar sized companies.

The compensation paid to Ping Zheng is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. CEO compensation is an important area to keep your eyes on, but we've also identified 6 warning signs for Shuanghua Holdings (3 can't be ignored!) that you should be aware of before investing here.

Important note: Shuanghua Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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