Should Shareholders Reconsider China Gas Holdings Limited's (HKG:384) CEO Compensation Package?

Key Insights

• China Gas Holdings to hold its Annual General Meeting on 21st of August
• Total pay for CEO Ming Hui Liu includes HK$10.2m salary
• Total compensation is 221% above industry average
• China Gas Holdings' three-year loss to shareholders was 11% while its EPS was down 25% over the past three years

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The results at China Gas Holdings Limited (HKG:384) have been quite disappointing recently and CEO Ming Hui Liu bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 21st 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.

View our latest analysis for China Gas Holdings

Comparing China Gas Holdings Limited's CEO Compensation With The Industry

Our data indicates that China Gas Holdings Limited has a market capitalization of HK$45b, and total annual CEO compensation was reported as HK$14m for the year to March 2025. This was the same as last year. In particular, the salary of HK$10.2m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Gas Utilities industry with market capitalizations ranging between HK$31b and HK$94b had a median total CEO compensation of HK$4.4m. Hence, we can conclude that Ming Hui Liu is remunerated higher than the industry median. Furthermore, Ming Hui Liu directly owns HK$3.3b worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 61% of total compensation represents salary and 39% is other remuneration. China Gas Holdings pays out 73% 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.

China Gas Holdings Limited's Growth

Over the last three years, China Gas Holdings Limited has shrunk its earnings per share by 25% per year. It saw its revenue drop 2.6% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has China Gas Holdings Limited Been A Good Investment?

Given the total shareholder loss of 11% over three years, many shareholders in China Gas Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for China Gas Holdings (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.