It's Probably Less Likely That Jintai Energy Holdings Limited's (HKG:2728) CEO Will See A Huge Pay Rise This Year

Key Insights

• Jintai Energy Holdings will host its Annual General Meeting on 12th of June
• Salary of HK$1.44m is part of CEO Hongbing Yuan's total remuneration
• The total compensation is similar to the average for the industry
• Jintai Energy Holdings' EPS declined by 122% over the past three years while total shareholder loss over the past three years was 85%

The underwhelming share price performance of Jintai Energy Holdings Limited (HKG:2728) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 12th of June and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

Check out our latest analysis for Jintai Energy Holdings

Comparing Jintai Energy Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Jintai Energy Holdings Limited has a market capitalization of HK$98m, and reported total annual CEO compensation of HK$1.5m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. In particular, the salary of HK$1.44m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Oil and Gas industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.5m. From this we gather that Hongbing Yuan is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	HK$1.4m	HK$1.4m	97%
Other	HK$45k	HK$47k	3%
Total Compensation	HK$1.5m	HK$1.5m	100%

On an industry level, around 92% of total compensation represents salary and 8% is other remuneration. Investors will find it interesting that Jintai Energy Holdings pays the bulk of its rewards through a traditional salary, instead of 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 Jintai Energy Holdings Limited's Growth Numbers

Jintai Energy Holdings Limited has reduced its earnings per share by 122% a year over the last three years. Its revenue is up 773% over the last year.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Jintai Energy Holdings Limited Been A Good Investment?

The return of -85% over three years would not have pleased Jintai Energy Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Hongbing receives almost all of their compensation through a salary. The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which is potentially serious) in Jintai Energy Holdings we think you should know about.

Important note: Jintai Energy Holdings 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. 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.