Does China Oil And Gas Group's (HKG:603) CEO Salary Compare Well With The Performance Of The Company?

Tie-liang Xu became the CEO of China Oil And Gas Group Limited (HKG:603) in 2009, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. 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 China Oil And Gas Group

How Does Total Compensation For Tie-liang Xu Compare With Other Companies In The Industry?

According to our data, China Oil And Gas Group Limited has a market capitalization of HK$2.1b, and paid its CEO total annual compensation worth HK$7.5m over the year to December 2019. This means that the compensation hasn't changed much from last year. Notably, the salary which is HK$7.33m, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between HK$775m and HK$3.1b, we discovered that the median CEO total compensation of that group was HK$1.8m. This suggests that Tie-liang Xu is paid more than the median for the industry. What's more, Tie-liang Xu holds HK$628m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, total compensation is equally proportioned between salary and other compensation, that is, they each represent approximately 50% of the total compensation. China Oil And Gas Group has gone down a largely traditional route, paying Tie-liang Xu a high salary, giving it preference over non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at China Oil And Gas Group Limited's Growth Numbers

China Oil And Gas Group Limited has seen its earnings per share (EPS) increase by 5.7% a year over the past three years. Its revenue is up 1.8% over the last year.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has China Oil And Gas Group Limited Been A Good Investment?

Given the total shareholder loss of 47% over three years, many shareholders in China Oil And Gas Group Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

Tie-liang receives almost all of their compensation through a salary. As we noted earlier, China Oil And Gas Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing for China Oil And Gas Group, and although EPS growth is steady, it hasn't set the world on fire. This doesn't look great when you consider Tie-liang is taking home compensation north of the industry average. Taking all this into account, it could be hard to get shareholder support for giving Tie-liang a raise.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for China Oil And Gas Group that investors should be aware of in a dynamic business environment.

Switching gears from China Oil And Gas Group, 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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