Stock Analysis

Key Things To Understand About CSSC Offshore & Marine Engineering (Group)'s (HKG:317) CEO Pay Cheque

SEHK:317
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Liping Chen is the CEO of CSSC Offshore & Marine Engineering (Group) Company Limited (HKG:317), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for CSSC Offshore & Marine Engineering (Group)

How Does Total Compensation For Liping Chen Compare With Other Companies In The Industry?

Our data indicates that CSSC Offshore & Marine Engineering (Group) Company Limited has a market capitalization of HK$28b, and total annual CEO compensation was reported as CN¥990k for the year to December 2019. That's a notable increase of 19% on last year. In particular, the salary of CN¥893.7k, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between HK$16b and HK$50b, we discovered that the median CEO total compensation of that group was CN¥1.6m. That is to say, Liping Chen is paid under the industry median.

Component20192018Proportion (2019)
Salary CN¥894k CN¥730k 90%
Other CN¥96k CN¥102k 10%
Total CompensationCN¥990k CN¥833k100%

On an industry level, around 86% of total compensation represents salary and 14% is other remuneration. CSSC Offshore & Marine Engineering (Group) is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
SEHK:317 CEO Compensation December 18th 2020

CSSC Offshore & Marine Engineering (Group) Company Limited's Growth

Over the past three years, CSSC Offshore & Marine Engineering (Group) Company Limited has seen its earnings per share (EPS) grow by 88% per year. It saw its revenue drop 22% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has CSSC Offshore & Marine Engineering (Group) Company Limited Been A Good Investment?

Given the total shareholder loss of 38% over three years, many shareholders in CSSC Offshore & Marine Engineering (Group) Company Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Liping is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However we must not forget that the EPS growth has been very strong over three years. Considering EPS are on the up, we would say Liping is compensated fairly. But shareholders will likely want to hold off on any raise for Liping until investor returns are positive.

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. We identified 3 warning signs for CSSC Offshore & Marine Engineering (Group) (1 can't be ignored!) that you should be aware of before investing here.

Switching gears from CSSC Offshore & Marine Engineering (Group), if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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