What We Learned About Chinese Energy Holdings' (HKG:8009) CEO Compensation

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 assess whether Chinese Energy Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Chinese Energy Holdings

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$21m, and total annual CEO compensation was reported as HK$960k for the year to March 2020. This means that the compensation hasn't changed much from last year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$960k.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.6m. Accordingly, Chinese Energy Holdings pays its CEO under the industry median. What's more, HN Chen holds HK$2.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

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 7.7% of the pie. At the company level, Chinese Energy Holdings pays HN Chen solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Chinese Energy Holdings Limited's Growth

Over the past three years, Chinese Energy Holdings Limited has seen its earnings per share (EPS) grow by 94% per year. In the last year, its revenue is up 1.8%.

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. 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?

Given the total shareholder loss of 82% over three years, many shareholders in Chinese Energy Holdings Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Chinese Energy Holdings rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. But we believe shareholders would want to see healthier returns before the CEO gets a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Chinese Energy Holdings you should be aware of, and 1 of them is a bit concerning.

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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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