What Can We Make Of Tianneng Power International's (HKG:819) CEO Compensation?

The CEO of Tianneng Power International Limited (HKG:819) is Tianren Zhang, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Tianneng Power International.

See our latest analysis for Tianneng Power International

How Does Total Compensation For Tianren Zhang Compare With Other Companies In The Industry?

At the time of writing, our data shows that Tianneng Power International Limited has a market capitalization of HK$17b, and reported total annual CEO compensation of CN¥1.6m for the year to December 2019. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is CN¥1.54m, represents most of the total compensation being paid.

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¥4.4m. This suggests that Tianren Zhang is paid below the industry median. Furthermore, Tianren Zhang directly owns HK$6.4b worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. Investors will find it interesting that Tianneng Power International pays the bulk of its rewards through a traditional salary, instead of 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 Tianneng Power International Limited's Growth Numbers

Tianneng Power International Limited has seen its earnings per share (EPS) increase by 29% a year over the past three years. Its revenue is up 8.4% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Tianneng Power International Limited Been A Good Investment?

We think that the total shareholder return of 171%, over three years, would leave most Tianneng Power International Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Tianren receives almost all of their compensation through a salary. As we touched on above, Tianneng Power International Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. And given most shareholders are probably very happy with recent shareholder returns, they might even think Tianren deserves a raise!

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Tianneng Power International that you should be aware of before investing.

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.

When trading Tianneng Power International or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.