Jian Dai has been the CEO of China Supply Chain Holdings Limited (HKG:3708) since 2017, and this article will examine the executive’s compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for China Supply Chain Holdings.
See our latest analysis for China Supply Chain Holdings
How Does Total Compensation For Jian Dai Compare With Other Companies In The Industry?
At the time of writing, our data shows that China Supply Chain Holdings Limited has a market capitalization of HK$1.0b, and reported total annual CEO compensation of HK$1.2m for the year to June 2020. That’s mostly flat as compared to the prior year’s compensation. In particular, the salary of HK$1.20m, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.9m. That is to say, Jian Dai is paid under the industry median. Moreover, Jian Dai also holds HK$572m worth of China Supply Chain Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK$1.2m | HK$1.2m | 99% |
| Other | HK$18k | HK$18k | 1% |
| Total Compensation | HK$1.2m | HK$1.2m | 100% |
Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 8.8% is other remuneration. China Supply Chain Holdings has gone down a largely traditional route, paying Jian Dai a high salary, giving it preference over non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at China Supply Chain Holdings Limited’s Growth Numbers
Over the last three years, China Supply Chain Holdings Limited has shrunk its earnings per share by 102% per year. Its revenue is down 8.4% over the previous year.
Few shareholders would be pleased to read that EPS have declined. 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 could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has China Supply Chain Holdings Limited Been A Good Investment?
With a three year total loss of 71% for the shareholders, China Supply Chain Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary…
China Supply Chain Holdings pays its CEO a majority of compensation through a salary. As we touched on above, China Supply Chain Holdings Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for China Supply Chain Holdings you should be aware of, and 1 of them is a bit unpleasant.
Important note: China Supply Chain Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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