Does China Renewable Energy Investment Limited’s (HKG:987) CEO Pay Matter?

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In 2008 Eric Oei was appointed CEO of China Renewable Energy Investment Limited (HKG:987). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for China Renewable Energy Investment

How Does Eric Oei’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that China Renewable Energy Investment Limited has a market cap of HK$506m, and is paying total annual CEO compensation of HK$1.3m. (This figure is for the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at HK$1.1m. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.5m.

That means Eric Oei receives fairly typical remuneration for the CEO of a company that size. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at China Renewable Energy Investment, below.

SEHK:987 CEO Compensation, May 11th 2019
SEHK:987 CEO Compensation, May 11th 2019

Is China Renewable Energy Investment Limited Growing?

On average over the last three years, China Renewable Energy Investment Limited has grown earnings per share (EPS) by 16% each year (using a line of best fit). Its revenue is up 14% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has China Renewable Energy Investment Limited Been A Good Investment?

China Renewable Energy Investment Limited has generated a total shareholder return of 11% over three years, so most shareholders would be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary…

Eric Oei is paid around the same as most CEOs of similar size companies.

Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. As a result of these considerations, I would suggest the CEO pay is reasonable. Shareholders may want to check for free if China Renewable Energy Investment insiders are buying or selling shares.

If you want to buy a stock that is better than China Renewable Energy Investment, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.