How Much Did Chu Kong Petroleum and Natural Gas Steel Pipe Holdings' (HKG:1938) CEO Pocket Last Year?

David Chen is the CEO of Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited (HKG:1938), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Chu Kong Petroleum and Natural Gas Steel Pipe Holdings

How Does Total Compensation For David Chen Compare With Other Companies In The Industry?

According to our data, Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited has a market capitalization of HK$465m, and paid its CEO total annual compensation worth CN¥1.9m over the year to December 2019. This means that the compensation hasn't changed much from last year. Notably, the salary of CN¥1.9m is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.7m. This suggests that Chu Kong Petroleum and Natural Gas Steel Pipe Holdings remunerates its CEO largely in line with the industry average. Moreover, David Chen also holds HK$314m worth of Chu Kong Petroleum and Natural Gas Steel Pipe Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 63% of total compensation out of all the companies we analyzed, while other remuneration made up 37% of the pie. On a company level, Chu Kong Petroleum and Natural Gas Steel Pipe Holdings prefers to reward its CEO through a salary, opting not to pay David Chen through non-salary benefits. 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 Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited's Growth Numbers

Over the past three years, Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited has seen its earnings per share (EPS) grow by 70% per year. Its revenue is down 37% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited Been A Good Investment?

Since shareholders would have lost about 34% over three years, some Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Chu Kong Petroleum and Natural Gas Steel Pipe Holdings rewards its CEO solely through a salary, ignoring non-salary benefits completely. As previously discussed, David is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. However, EPS growth is positive over the same time frame. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Chu Kong Petroleum and Natural Gas Steel Pipe Holdings that you should be aware of before investing.

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. 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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