Is Gemdale Properties and Investment Corporation Limited's (HKG:535) CEO Paid At A Competitive Rate?

Jiajun Xu became the CEO of Gemdale Properties and Investment Corporation Limited (HKG:535) in 2013. 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.

See our latest analysis for Gemdale Properties and Investment

How Does Jiajun Xu's Compensation Compare With Similar Sized Companies?

According to our data, Gemdale Properties and Investment Corporation Limited has a market capitalization of HK$20b, and paid its CEO total annual compensation worth CN¥2.7m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CN¥677k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from CN¥14b to CN¥45b, and the median CEO total compensation was CN¥3.9m.

Most shareholders would consider it a positive that Jiajun Xu takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.

The graphic below shows how CEO compensation at Gemdale Properties and Investment has changed from year to year.

Is Gemdale Properties and Investment Corporation Limited Growing?

On average over the last three years, Gemdale Properties and Investment Corporation Limited has grown earnings per share (EPS) by 25% each year (using a line of best fit). In the last year, its revenue is up 62%.

This demonstrates that the company has been improving recently. A good result. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Gemdale Properties and Investment Corporation Limited Been A Good Investment?

I think that the total shareholder return of 187%, over three years, would leave most Gemdale Properties and Investment Corporation Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

It appears that Gemdale Properties and Investment Corporation Limited remunerates its CEO below most similar sized companies.

Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Jiajun Xu deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Gemdale Properties and Investment.

If you want to buy a stock that is better than Gemdale Properties and Investment, 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.

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