We Think Shareholders May Want To Consider A Review Of China Renewable Energy Investment Limited's (HKG:987) CEO Compensation Package

Key Insights

• China Renewable Energy Investment's Annual General Meeting to take place on 31st of May
• CEO Eric Oei's total compensation includes salary of HK$2.37m
• Total compensation is similar to the industry average
• China Renewable Energy Investment's three-year loss to shareholders was 36% while its EPS was down 35% over the past three years

China Renewable Energy Investment Limited (HKG:987) has not performed well recently and CEO Eric Oei will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 31st of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for China Renewable Energy Investment

How Does Total Compensation For Eric Oei Compare With Other Companies In The Industry?

At the time of writing, our data shows that China Renewable Energy Investment Limited has a market capitalization of HK$306m, and reported total annual CEO compensation of HK$2.7m for the year to December 2023. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at HK$2.37m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Hong Kong Renewable Energy industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.1m. So it looks like China Renewable Energy Investment compensates Eric Oei in line with the median for the industry. Furthermore, Eric Oei directly owns HK$58m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	HK$2.4m	HK$2.3m	89%
Other	HK$291k	HK$287k	11%
Total Compensation	HK$2.7m	HK$2.6m	100%

Talking in terms of the industry, salary represented approximately 52% of total compensation out of all the companies we analyzed, while other remuneration made up 48% of the pie. China Renewable Energy Investment is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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 Renewable Energy Investment Limited's Growth Numbers

Over the last three years, China Renewable Energy Investment Limited has shrunk its earnings per share by 35% per year. In the last year, its revenue is down 8.0%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, 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?

Few China Renewable Energy Investment Limited shareholders would feel satisfied with the return of -36% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. 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 4 warning signs for China Renewable Energy Investment (of which 1 shouldn't be ignored!) 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.