This article will reflect on the compensation paid to Xiaoming Hu who has served as CEO of Kandi Technologies Group, Inc. (NASDAQ:KNDI) since 2007. This analysis will also assess whether Kandi Technologies Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Kandi Technologies Group, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Kandi Technologies Group, Inc. has a market capitalization of US$335m, and reported total annual CEO compensation of US$316k for the year to December 2019. That's a notable decrease of 62% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$52k.
On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$2.2m. In other words, Kandi Technologies Group pays its CEO lower than the industry median. What's more, Xiaoming Hu holds US$88m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 22% of total compensation out of all the companies we analyzed, while other remuneration made up 78% of the pie. In Kandi Technologies Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Kandi Technologies Group, Inc.'s Growth Numbers
Over the past three years, Kandi Technologies Group, Inc. has seen its earnings per share (EPS) grow by 74% per year. It saw its revenue drop 8.1% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Kandi Technologies Group, Inc. Been A Good Investment?
Kandi Technologies Group, Inc. has generated a total shareholder return of 20% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
As we touched on above, Kandi Technologies Group, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, EPS growth has been rock solid for the past three years. Shareholder returns, in comparison, have not been as impressive. We would wish for better returns (whether dividends or capital gains) but we do admire the solidEPS growth on show here. As a result of these considerations, CEO compensation seems quite appropriate.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Kandi Technologies Group that investors should think about before committing capital to this stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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