This Is The Reason Why We Think Central New Energy Holding Group Limited's (HKG:1735) CEO Deserves A Bump Up To Their Compensation

Key Insights

• Central New Energy Holding Group to hold its Annual General Meeting on 28th of June
• Salary of HK$600.0k is part of CEO Zhuyun Yu's total remuneration
• The total compensation is 73% less than the average for the industry
• Central New Energy Holding Group's total shareholder return over the past three years was 877% while its EPS grew by 13% over the past three years

The solid performance at Central New Energy Holding Group Limited (HKG:1735) has been impressive and shareholders will probably be pleased to know that CEO Zhuyun Yu has delivered. At the upcoming AGM on 28th of June, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

Check out our latest analysis for Central New Energy Holding Group

Comparing Central New Energy Holding Group Limited's CEO Compensation With The Industry

Our data indicates that Central New Energy Holding Group Limited has a market capitalization of HK$36b, and total annual CEO compensation was reported as HK$618k for the year to December 2023. There was no change in the compensation compared to last year. In particular, the salary of HK$600.0k, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the Hong Kong Construction industry with market capitalizations between HK$16b and HK$50b, we discovered that the median CEO total compensation of that group was HK$2.3m. That is to say, Zhuyun Yu is paid under the industry median. What's more, Zhuyun Yu holds HK$25b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	HK$600k	HK$600k	97%
Other	HK$18k	HK$18k	3%
Total Compensation	HK$618k	HK$618k	100%

On an industry level, around 83% of total compensation represents salary and 17% is other remuneration. Central New Energy Holding Group has gone down a largely traditional route, paying Zhuyun Yu a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Central New Energy Holding Group Limited's Growth Numbers

Over the past three years, Central New Energy Holding Group Limited has seen its earnings per share (EPS) grow by 13% per year. Its revenue is up 150% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Central New Energy Holding Group Limited Been A Good Investment?

Boasting a total shareholder return of 877% over three years, Central New Energy Holding Group Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Central New Energy Holding Group pays its CEO a majority of compensation through a salary. Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Central New Energy Holding Group (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

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