HN Chen has been the CEO of Chinese Energy Holdings Limited (HKG:8009) since 2016, and this article will examine the executive's compensation 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.
How Does Total Compensation For HN Chen Compare With Other Companies In The Industry?
Our data indicates that Chinese Energy Holdings Limited has a market capitalization of HK$18m, and total annual CEO compensation was reported as HK$960k for the year to March 2020. That is, the compensation was roughly the same as last year. Notably, the salary of HK$960k is the entirety of the CEO compensation.
For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.3m. In other words, Chinese Energy Holdings pays its CEO lower than the industry median. Furthermore, HN Chen directly owns HK$2.2m 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 92% of total compensation out of all the companies we analyzed, while other remuneration made up 8.1% of the pie. Speaking on a company level, Chinese Energy Holdings prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Chinese Energy Holdings Limited's Growth Numbers
Over the past three years, Chinese Energy Holdings Limited has seen its earnings per share (EPS) grow by 97% per year. Its revenue is down 7.6% over the previous year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Chinese Energy Holdings Limited Been A Good Investment?
Since shareholders would have lost about 82% over three years, some Chinese Energy Holdings Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
Chinese Energy Holdings pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we touched on above, Chinese Energy Holdings Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, the company has impressed with its EPS growth over three years. Considering EPS are on the up, we would say HN is compensated fairly. But shareholders will likely want to hold off on any raise for HN until investor returns are positive.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Chinese Energy Holdings that investors should be aware of in a dynamic business environment.
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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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