Key Things To Understand About China Geothermal Industry Development Group's (HKG:8128) CEO Pay Cheque

Manquan Wang has been the CEO of China Geothermal Industry Development Group Limited (HKG:8128) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for China Geothermal Industry Development Group.

See our latest analysis for China Geothermal Industry Development Group

Comparing China Geothermal Industry Development Group Limited's CEO Compensation With the industry

Our data indicates that China Geothermal Industry Development Group Limited has a market capitalization of HK$525m, and total annual CEO compensation was reported as HK$1.7m for the year to December 2019. We note that's a decrease of 28% compared to last year. We note that the salary portion, which stands at HK$1.62m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.5m. This suggests that China Geothermal Industry Development Group remunerates its CEO largely in line with the industry average.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. China Geothermal Industry Development Group pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at China Geothermal Industry Development Group Limited's Growth Numbers

Over the last three years, China Geothermal Industry Development Group Limited has shrunk its earnings per share by 66% per year. It achieved revenue growth of 29% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 China Geothermal Industry Development Group Limited Been A Good Investment?

With a three year total loss of 27% for the shareholders, China Geothermal Industry Development Group Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

China Geothermal Industry Development Group pays its CEO a majority of compensation through a salary. As previously discussed, Manquan is compensated close to the median for companies of its size, and which belong to the same industry. Still, the company is logging healthy revenue growth over the last year. In contrast, over the same time span, shareholder returns are negative. EPS growth is bleak as well, adding fuel to the fire. Overall, we wouldn't say CEO is highly paid, but shareholders might not go for a raise before business metrics start to improve precipitously.

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 3 warning signs for China Geothermal Industry Development Group (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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