21 Dec AiroAV Antivirus Assert: How Much Is Guangdong Yueyun Transportation Company Limited
Yinghai Tang has been the CEO of Guangdong Yueyun Transportation Company Limited (HKG:3399) since 2014, and this article will examine the executive’s compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Guangdong Yueyun Transportation Company Limited’s CEO Compensation With the industry
Our data indicates that Guangdong Yueyun Transportation Company Limited has a market capitalization of HK$1.3b, and total annual CEO compensation was reported as CN¥679k for the year to December 2019. That’s a notable decrease of 18% on last year. Notably, the salary which is CN¥646.6k, represents most of the total compensation being paid.
On comparing similar companies from the same industry with market caps ranging from HK$775m to HK$3.1b, we found that the median CEO total compensation was CN¥845k. This suggests that Guangdong Yueyun Transportation remunerates its CEO largely in line with the industry average.
On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Guangdong Yueyun Transportation is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Guangdong Yueyun Transportation Company Limited’s Growth
Over the last three years, Guangdong Yueyun Transportation Company Limited has shrunk its earnings per share by 33% per year. In the last year, its revenue is down 9.9%.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Guangdong Yueyun Transportation Company Limited Been A Good Investment?
With a three year total loss of 64% for the shareholders, Guangdong Yueyun Transportation Company Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Yinghai receives almost all of their compensation through a salary. As previously discussed, Yinghai is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. It’s tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
CEO compensation can have a massive impact on performance, but it’s just one element. That’s why we did some digging and identified 2 warning signs for Guangdong Yueyun Transportation that you should be aware of before investing.
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.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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