This article will reflect on the compensation paid to Junjing An who has served as CEO of CGN Mining Company Limited (HKG:1164) since 2018. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for CGN Mining.
See our latest analysis for CGN Mining
Comparing CGN Mining Company Limited's CEO Compensation With the industry
At the time of writing, our data shows that CGN Mining Company Limited has a market capitalization of HK$1.8b, and reported total annual CEO compensation of HK$950k for the year to December 2019. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$950k.
On comparing similar companies from the same industry with market caps ranging from HK$775m to HK$3.1b, we found that the median CEO total compensation was HK$1.4m. Accordingly, CGN Mining pays its CEO under the industry median.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | HK$950k | HK$871k | 100% |
| Other | - | HK$62k | - |
| Total Compensation | HK$950k | HK$933k | 100% |
On an industry level, around 84% of total compensation represents salary and 16% is other remuneration. At the company level, CGN Mining pays Junjing An solely through a salary, preferring to go down a conventional route. 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 CGN Mining Company Limited's Growth Numbers
Over the past three years, CGN Mining Company Limited has seen its earnings per share (EPS) grow by 15% per year. In the last year, its revenue changed by just 0.06%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 CGN Mining Company Limited Been A Good Investment?
With a three year total loss of 52% for the shareholders, CGN Mining Company Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
CGN Mining pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Junjing is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth over three years is certainly impressive. 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.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 4 warning signs for CGN Mining (3 don't sit too well with us!) that you should be aware of before investing here.
Important note: CGN Mining is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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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About SEHK:1164
CGN Mining
Engages in the development and trading of natural uranium resources to nuclear power plants.
Reasonable growth potential with acceptable track record.
