Zhijun Ye has been the CEO of Sinopec Kantons Holdings Limited (HKG:934) since 2002, and this article will examine the executive's compensation 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.
Check out our latest analysis for Sinopec Kantons Holdings
How Does Total Compensation For Zhijun Ye Compare With Other Companies In The Industry?
According to our data, Sinopec Kantons Holdings Limited has a market capitalization of HK$7.3b, and paid its CEO total annual compensation worth HK$2.7m over the year to December 2019. Notably, that's an increase 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$993k.
On comparing similar companies from the same industry with market caps ranging from HK$3.1b to HK$12b, we found that the median CEO total compensation was HK$534k. Accordingly, our analysis reveals that Sinopec Kantons Holdings Limited pays Zhijun Ye north of the industry median.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | HK$993k | HK$1.0m | 36% |
| Other | HK$1.7m | HK$1.3m | 64% |
| Total Compensation | HK$2.7m | HK$2.3m | 100% |
Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. Sinopec Kantons Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Sinopec Kantons Holdings Limited's Growth
Over the last three years, Sinopec Kantons Holdings Limited has not seen its earnings per share change much, though they have deteriorated slightly. It saw its revenue drop 15% over the last year.
A lack of EPS improvement is not good to see. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Sinopec Kantons Holdings Limited Been A Good Investment?
With a three year total loss of 25% for the shareholders, Sinopec Kantons Holdings Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we noted earlier, Sinopec Kantons Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Sinopec Kantons Holdings that investors should think about before committing capital to this stock.
Important note: Sinopec Kantons 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. 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:934
Sinopec Kantons Holdings
An investment holding company, provides crude oil jetty services.
Flawless balance sheet with proven track record and pays a dividend.
