The Compensation For Yankuang Energy Group Company Limited's (HKG:1171) CEO Looks Deserved And Here's Why

Key Insights

• Yankuang Energy Group to hold its Annual General Meeting on 21st of June
• Total pay for CEO Yaomeng Xiao includes CN¥1.15m salary
• The overall pay is comparable to the industry average
• Yankuang Energy Group's EPS grew by 30% over the past three years while total shareholder return over the past three years was 284%

The performance at Yankuang Energy Group Company Limited (HKG:1171) has been quite strong recently and CEO Yaomeng Xiao has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 21st of June. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for Yankuang Energy Group

How Does Total Compensation For Yaomeng Xiao Compare With Other Companies In The Industry?

At the time of writing, our data shows that Yankuang Energy Group Company Limited has a market capitalization of HK$172b, and reported total annual CEO compensation of CN¥1.3m for the year to December 2023. Notably, that's a decrease of 32% over the year before. In particular, the salary of CN¥1.15m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Oil and Gas industry with market capitalizations above HK$62b, reported a median total CEO compensation of CN¥1.0m. From this we gather that Yaomeng Xiao is paid around the median for CEOs in the industry. What's more, Yaomeng Xiao holds HK$9.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.2m	CN¥1.7m	87%
Other	CN¥174k	CN¥260k	13%
Total Compensation	CN¥1.3m	CN¥1.9m	100%

Speaking on an industry level, nearly 93% of total compensation represents salary, while the remainder of 7% is other remuneration. Our data reveals that Yankuang Energy Group allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Yankuang Energy Group Company Limited's Growth

Yankuang Energy Group Company Limited's earnings per share (EPS) grew 30% per year over the last three years. In the last year, its revenue is down 40%.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Yankuang Energy Group Company Limited Been A Good Investment?

Boasting a total shareholder return of 284% over three years, Yankuang Energy Group Company Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 2 which are concerning) in Yankuang Energy Group we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com