In This Article:
Lingling Hu has been the CEO of Guangshen Railway Company Limited (HKG:525) since 2015. First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Guangshen Railway
How Does Lingling Hu's Compensation Compare With Similar Sized Companies?
Our data indicates that Guangshen Railway Company Limited is worth HK$23b, and total annual CEO compensation was reported as CN¥471k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CN¥333k. We looked at a group of companies with market capitalizations from CN¥14b to CN¥45b, and the median CEO total compensation was CN¥3.2m.
A first glance this seems like a real positive for shareholders, since Lingling Hu 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.
You can see, below, how CEO compensation at Guangshen Railway has changed over time.
Is Guangshen Railway Company Limited Growing?
On average over the last three years, Guangshen Railway Company Limited has shrunk earnings per share by 14% each year (measured with a line of best fit). In the last year, its revenue is up 5.6%.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Guangshen Railway Company Limited Been A Good Investment?
Since shareholders would have lost about 37% over three years, some Guangshen Railway Company Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Guangshen Railway Company Limited is currently paying its CEO below what is normal for companies of its size.
The compensation paid to Lingling Hu 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. So you may want to check if insiders are buying Guangshen Railway shares with their own money (free access).