In 2014 Harry King was appointed CEO of Sino Oil and Gas Holdings Limited (HKG:702). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Harry King’s Compensation Compare With Similar Sized Companies?
Our data indicates that Sino Oil and Gas Holdings Limited is worth HK$348m, and total annual CEO compensation was reported as HK$2.0m for the year to December 2018. Notably, the salary of HK$2.0m is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO total compensation in that group is HK$1.8m.
So Harry King is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at Sino Oil and Gas Holdings has changed over time.
Is Sino Oil and Gas Holdings Limited Growing?
Over the last three years Sino Oil and Gas Holdings Limited has shrunk its earnings per share by an average of 27% per year (measured with a line of best fit). In the last year, its revenue is down 46%.
Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don’t have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Sino Oil and Gas Holdings Limited Been A Good Investment?
Given the total loss of 95% over three years, many shareholders in Sino Oil and Gas Holdings Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
Harry King is paid around what is normal the leaders of comparable size companies.
After looking at EPS and total shareholder returns, it’s certainly hard to argue the company has performed well, since both metrics are down. Suffice it to say, we don’t think the CEO is underpaid! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Sino Oil and Gas Holdings (free visualization of insider trades).
If you want to buy a stock that is better than Sino Oil and Gas Holdings, this free list of high return, low debt companies is a great place to look.
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