In This Article:
In 2014 Heqiang Liu was appointed CEO of China New Town Development Company Limited (HKG:1278). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for China New Town Development
How Does Heqiang Liu's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that China New Town Development Company Limited has a market cap of HK$1.5b, and reported total annual CEO compensation of CN¥1.2m for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth CN¥1.2m. We looked at a group of companies with market capitalizations from CN¥704m to CN¥2.8b, and the median CEO total compensation was CN¥2.0m.
A first glance this seems like a real positive for shareholders, since Heqiang Liu is paid less than the average total compensation paid by similar sized companies. 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 China New Town Development has changed from year to year.
Is China New Town Development Company Limited Growing?
China New Town Development Company Limited has increased its earnings per share (EPS) by an average of 2.8% a year, over the last three years (using a line of best fit). It saw its revenue drop 30% over the last year.
I would prefer it if there was revenue growth, but it is good to see EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has China New Town Development Company Limited Been A Good Investment?
Given the total loss of 59% over three years, many shareholders in China New Town Development 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...
China New Town Development Company Limited is currently paying its CEO below what is normal for companies of its size.
Heqiang Liu is paid less than CEOs of similar size companies, but growth hasn't been particularly impressive and the total shareholder return over three years would leave many disappointed. Many shareholders would probably like to see improvements, but our analysis does not suggest that CEO compensation is too generous. So you may want to check if insiders are buying China New Town Development shares with their own money (free access).