Is CSSC Offshore & Marine Engineering (Group) Company Limited's (HKG:317) CEO Pay Justified?
Liping Chen is the CEO of CSSC Offshore & Marine Engineering (Group) Company Limited (HKG:317). 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for CSSC Offshore & Marine Engineering (Group)
How Does Liping Chen's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that CSSC Offshore & Marine Engineering (Group) Company Limited has a market cap of HK$18b, and reported total annual CEO compensation of CN¥833k for the year to December 2018. Notably, the salary of CN¥800k is the vast majority of the CEO compensation. We examined companies with market caps from CN¥6.9b to CN¥22b, and discovered that the median CEO total compensation of that group was CN¥3.8m.
Most shareholders would consider it a positive that Liping Chen 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 CSSC Offshore & Marine Engineering (Group) has changed from year to year.
Is CSSC Offshore & Marine Engineering (Group) Company Limited Growing?
On average over the last three years, CSSC Offshore & Marine Engineering (Group) Company Limited has shrunk earnings per share by 114% each year (measured with a line of best fit). It achieved revenue growth of 2.5% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has CSSC Offshore & Marine Engineering (Group) Company Limited Been A Good Investment?
Given the total loss of 61% over three years, many shareholders in CSSC Offshore & Marine Engineering (Group) Company Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
CSSC Offshore & Marine Engineering (Group) Company Limited is currently paying its CEO below what is normal for companies of its size.
Shareholders should note that compensation for Liping Chen is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. 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. Shareholders may want to check for free if CSSC Offshore & Marine Engineering (Group) insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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