Zhanjun Zhu has been the CEO of GCL-Poly Energy Holdings Limited (HKG:3800) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for GCL-Poly Energy Holdings.
Check out our latest analysis for GCL-Poly Energy Holdings
Comparing GCL-Poly Energy Holdings Limited's CEO Compensation With the industry
Our data indicates that GCL-Poly Energy Holdings Limited has a market capitalization of HK$6.6b, and total annual CEO compensation was reported as CN¥6.5m for the year to December 2019. That's mostly flat as compared to the prior year's compensation. In particular, the salary of CN¥4.65m, makes up a huge portion of the total compensation being paid to the CEO.
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 CN¥3.9m. This suggests that Zhanjun Zhu is paid more than the median for the industry. Furthermore, Zhanjun Zhu directly owns HK$1.1m worth of shares in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CN¥4.7m | CN¥4.5m | 72% |
| Other | CN¥1.8m | CN¥1.8m | 28% |
| Total Compensation | CN¥6.5m | CN¥6.3m | 100% |
On an industry level, roughly 83% of total compensation represents salary and 17% is other remuneration. It's interesting to note that GCL-Poly Energy Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at GCL-Poly Energy Holdings Limited's Growth Numbers
Over the last three years, GCL-Poly Energy Holdings Limited has shrunk its earnings per share by 98% per year. In the last year, its revenue is down 6.4%.
Few shareholders would be pleased to read that EPS have declined. 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 GCL-Poly Energy Holdings Limited Been A Good Investment?
Given the total shareholder loss of 65% over three years, many shareholders in GCL-Poly Energy Holdings Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we touched on above, GCL-Poly Energy Holdings Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good against shareholder returns, which have been negative for the past three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for GCL-Poly Energy Holdings (1 is a bit unpleasant!) that you should be aware of before investing here.
Switching gears from GCL-Poly Energy Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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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