We Discuss Why Mongolia Energy Corporation Limited's (HKG:276) CEO Compensation May Be Closely Reviewed

Key Insights

• Mongolia Energy to hold its Annual General Meeting on 23rd of August
• Salary of HK$4.83m is part of CEO Yvette Ong's total remuneration
• The overall pay is 1,413% above the industry average
• Over the past three years, Mongolia Energy's EPS fell by 2.2% and over the past three years, the total loss to shareholders 22%

Mongolia Energy Corporation Limited (HKG:276) has not performed well recently and CEO Yvette Ong will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 23rd of August. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Mongolia Energy

How Does Total Compensation For Yvette Ong Compare With Other Companies In The Industry?

At the time of writing, our data shows that Mongolia Energy Corporation Limited has a market capitalization of HK$107m, and reported total annual CEO compensation of HK$22m for the year to March 2024. Notably, that's a decrease of 16% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$4.8m.

In comparison with other companies in the Hong Kong Oil and Gas industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.5m. This suggests that Yvette Ong is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	HK$4.8m	HK$4.9m	22%
Other	HK$18m	HK$22m	78%
Total Compensation	HK$22m	HK$27m	100%

On an industry level, around 94% of total compensation represents salary and 6% is other remuneration. It's interesting to note that Mongolia Energy allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Mongolia Energy Corporation Limited's Growth Numbers

Mongolia Energy Corporation Limited has reduced its earnings per share by 2.2% a year over the last three years. Its revenue is up 9.2% over the last year.

The lack of EPS growth is certainly uninspiring. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Mongolia Energy Corporation Limited Been A Good Investment?

Since shareholders would have lost about 22% over three years, some Mongolia Energy Corporation 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...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 5 warning signs (and 3 which are a bit concerning) in Mongolia Energy 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.