Most Shareholders Will Probably Agree With Tianneng Power International Limited's (HKG:819) CEO Compensation

CEO Tianren Zhang has done a decent job of delivering relatively good performance at Tianneng Power International Limited (HKG:819) recently. As shareholders go into the upcoming AGM on 18 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for Tianneng Power International

Comparing Tianneng Power International Limited's CEO Compensation With the industry

According to our data, Tianneng Power International Limited has a market capitalization of HK$15b, and paid its CEO total annual compensation worth CN¥1.6m over the year to December 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at CN¥1.51m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from HK$7.8b to HK$25b, the reported median CEO total compensation was CN¥2.0m. From this we gather that Tianren Zhang is paid around the median for CEOs in the industry. Furthermore, Tianren Zhang directly owns HK$5.6b worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 68% of total compensation out of all the companies we analyzed, while other remuneration made up 32% of the pie. Tianneng Power International pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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.

Tianneng Power International Limited's Growth

Tianneng Power International Limited has seen its earnings per share (EPS) increase by 28% a year over the past three years. Its revenue is up 32% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Tianneng Power International Limited Been A Good Investment?

With a total shareholder return of 19% over three years, Tianneng Power International Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Tianneng Power International pays its CEO a majority of compensation through a salary. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for Tianneng Power International (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Important note: Tianneng Power International 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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