Is China Dredging Environment Protection Holdings Limited's (HKG:871) CEO Paid Enough Relative To Peers?

In 2017 Xuze Wu was appointed CEO of China Dredging Environment Protection Holdings Limited (HKG:871). 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 - 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.

View our latest analysis for China Dredging Environment Protection Holdings

How Does Xuze Wu's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that China Dredging Environment Protection Holdings Limited has a market cap of HK$125m, and reported total annual CEO compensation of CN¥479k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at . We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We took a group of companies with market capitalizations below CN¥1.4b, and calculated the median CEO total compensation to be CN¥1.6m.

A first glance this seems like a real positive for shareholders, since Xuze Wu 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 a visual representation of the CEO compensation at China Dredging Environment Protection Holdings, below.

Is China Dredging Environment Protection Holdings Limited Growing?

On average over the last three years, China Dredging Environment Protection Holdings Limited has shrunk earnings per share by 49% each year (measured with a line of best fit). It saw its revenue drop 20% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. 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 might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has China Dredging Environment Protection Holdings Limited Been A Good Investment?

Given the total loss of 78% over three years, many shareholders in China Dredging Environment Protection Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

It looks like China Dredging Environment Protection Holdings Limited pays its CEO less than similar sized companies.

Xuze Wu is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. 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 China Dredging Environment Protection Holdings shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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