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Does CITIC Limited's (HKG:267) CEO Salary Compare Well With Others?

In 2014, Jiong Wang was appointed CEO of CITIC Limited (HKG:267). This analysis aims first to contrast CEO compensation with other large companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for CITIC

How Does Jiong Wang's Compensation Compare With Similar Sized Companies?

Our data indicates that CITIC Limited is worth HK$219b, and total annual CEO compensation was reported as HK$970k for the year to December 2019. That's a modest increase of 6.6% on the prior year year. We think total compensation is more important but we note that the CEO salary is lower, at HK$410k. We looked at a group of companies with market capitalizations over HK$62b and the median CEO total compensation was HK$6.2m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

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Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of CITIC. Speaking on an industry level, we can see that nearly 46% of total compensation represents salary, while the remainder of 54% is other remuneration. So it seems like there isn't a significant difference between CITIC and the broader market, in terms of salary allocation in the overall compensation package.

This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance. You can see, below, how CEO compensation at CITIC has changed over time.

SEHK:267 CEO Compensation April 25th 2020
SEHK:267 CEO Compensation April 25th 2020

Is CITIC Limited Growing?

On average over the last three years, CITIC Limited has seen earnings per share (EPS) move in a favourable direction by 15% each year (using a line of best fit). It achieved revenue growth of 5.9% over the last year.

This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.

Has CITIC Limited Been A Good Investment?

Since shareholders would have lost about 27% over three years, some CITIC Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

It appears that CITIC Limited remunerates its CEO below most large companies.

Since the business is growing, many would argue this suggests the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we would not say that Jiong Wang is generously paid, it would be good to see an improvement in business performance before too an increase in pay. This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. Taking a breather from CEO compensation, we've spotted 3 warning signs for CITIC (of which 1 doesn't sit too well with us!) you should know about in order to have a holistic understanding of the stock.

If you want to buy a stock that is better than CITIC, this free list of high return, low debt companies is a great place to look.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.