It's Unlikely That Shareholders Will Increase Shengli Oil & Gas Pipe Holdings Limited's (HKG:1080) Compensation By Much This Year

The underwhelming performance at Shengli Oil & Gas Pipe Holdings Limited (HKG:1080) recently has probably not pleased shareholders. At the upcoming AGM on 18 June 2021, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

See our latest analysis for Shengli Oil & Gas Pipe Holdings

How Does Total Compensation For Bizhuang Zhang Compare With Other Companies In The Industry?

Our data indicates that Shengli Oil & Gas Pipe Holdings Limited has a market capitalization of HK$302m, and total annual CEO compensation was reported as CN¥909k for the year to December 2020. That's a notable decrease of 36% on last year. In particular, the salary of CN¥711.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.4m. Accordingly, Shengli Oil & Gas Pipe Holdings pays its CEO under the industry median. What's more, Bizhuang Zhang holds HK$18m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	CN¥711k	CN¥1.1m	78%
Other	CN¥198k	CN¥343k	22%
Total Compensation	CN¥909k	CN¥1.4m	100%

Talking in terms of the industry, salary represented approximately 55% of total compensation out of all the companies we analyzed, while other remuneration made up 45% of the pie. According to our research, Shengli Oil & Gas Pipe Holdings has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Shengli Oil & Gas Pipe Holdings Limited's Growth

Over the last three years, Shengli Oil & Gas Pipe Holdings Limited has shrunk its earnings per share by 15% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Shengli Oil & Gas Pipe Holdings Limited Been A Good Investment?

Few Shengli Oil & Gas Pipe Holdings Limited shareholders would feel satisfied with the return of -70% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Shengli Oil & Gas Pipe Holdings that investors should think about before committing capital to this 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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