Does China Environmental Technology and Bioenergy Holdings Limited’s (HKG:1237) CEO Pay Compare Well With Peers?

The CEO of China Environmental Technology and Bioenergy Holdings Limited (HKG:1237) is Zheyan Wu. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for China Environmental Technology and Bioenergy Holdings

How Does Zheyan Wu’s Compensation Compare With Similar Sized Companies?

According to our data, China Environmental Technology and Bioenergy Holdings Limited has a market capitalization of HK$77m, and paid its CEO total annual compensation worth CN¥777k over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CN¥4.0k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations under CN¥1.4b, and the median CEO total compensation was CN¥1.5m.

Most shareholders would consider it a positive that Zheyan Wu takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion. Although we don’t have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

You can see a visual representation of the CEO compensation at China Environmental Technology and Bioenergy Holdings, below.

SEHK:1237 CEO Compensation, December 10th 2019
SEHK:1237 CEO Compensation, December 10th 2019

Is China Environmental Technology and Bioenergy Holdings Limited Growing?

Over the last three years China Environmental Technology and Bioenergy Holdings Limited has shrunk its earnings per share by an average of 82% per year (measured with a line of best fit). In the last year, its revenue is up 24%.

Sadly for shareholders, earnings per share are actually down, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

Has China Environmental Technology and Bioenergy Holdings Limited Been A Good Investment?

Given the total loss of 79% over three years, many shareholders in China Environmental Technology and Bioenergy Holdings Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

China Environmental Technology and Bioenergy Holdings Limited is currently paying its CEO below what is normal for companies of its size.

Shareholders should note that compensation for Zheyan Wu is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling China Environmental Technology and Bioenergy Holdings (free visualization of insider trades).

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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