Zhao Yongqi has been the CEO of Kunlun Energy Company Limited (HKG:135) since 2013, 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 Kunlun Energy.
How Does Total Compensation For Zhao Yongqi Compare With Other Companies In The Industry?
According to our data, Kunlun Energy Company Limited has a market capitalization of HK$44b, and paid its CEO total annual compensation worth CN¥962k over the year to December 2019. We note that's an increase of 21% above last year. We note that the salary portion, which stands at CN¥888.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations ranging from HK$31b to HK$93b, the reported median CEO total compensation was CN¥7.4m. That is to say, Zhao Yongqi is paid under the industry median.
On an industry level, around 63% of total compensation represents salary and 37% is other remuneration. Kunlun Energy pays out 92% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Kunlun Energy Company Limited's Growth
Over the past three years, Kunlun Energy Company Limited has seen its earnings per share (EPS) grow by 77% per year. In the last year, its revenue is up 2.4%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Kunlun Energy Company Limited Been A Good Investment?
Since shareholders would have lost about 17% over three years, some Kunlun Energy Company Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As previously discussed, Zhao is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth over three years is certainly impressive. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. Shareholders, though, would ideally like to see shareholder returns head north before they agree to any 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 3 warning signs for Kunlun Energy that you should be aware of before investing.
Important note: Kunlun Energy 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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