Here’s What We Think About Chinese Energy Holdings Limited’s (HKG:8009) CEO Pay

Haining Chen has been the CEO of Chinese Energy Holdings Limited (HKG:8009) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Chinese Energy Holdings

How Does Haining Chen’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Chinese Energy Holdings Limited has a market cap of HK$35m, and is paying total annual CEO compensation of HK$960k. (This is based on the year to 2018). Notably, the salary of HK$960k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO compensation was HK$1.7m.

Most shareholders would consider it a positive that Haining Chen takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance. Take a look at Chinese Energy Holdings’s profit growth by viewing this free data-rich visualization of earnings, revenue and cash flow.

You can see, below, how CEO compensation at Chinese Energy Holdings has changed over time.

SEHK:8009 CEO Compensation December 10th 18
SEHK:8009 CEO Compensation December 10th 18

Is Chinese Energy Holdings Limited Growing?

Over the last three years Chinese Energy Holdings Limited has grown its earnings per share (EPS) by an average of 82% per year. Its revenue is down -6.9% over last year.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end.

Has Chinese Energy Holdings Limited Been A Good Investment?

With a three year total loss of 91%, Chinese Energy Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

It appears that Chinese Energy Holdings Limited remunerates its CEO below most similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. We’re not critical of the remuneration Haining Chen receives, but it would be good to see improved returns to shareholders before the remuneration grows too much.

In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. So you may want to check if insiders are buying Chinese Energy Holdings shares with their own money (free access).

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.