In 2009 Guoqiang Zhao was appointed CEO of China Energy Development Holdings Limited (HKG:228). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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.
How Does Guoqiang Zhao's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that China Energy Development Holdings Limited has a market cap of HK$1.8b, and reported total annual CEO compensation of HK$1.5m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at . Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from HK$784m to HK$3.1b, and discovered that the median CEO total compensation of that group was HK$2.3m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at China Energy Development Holdings, below.
Is China Energy Development Holdings Limited Growing?
China Energy Development Holdings Limited has increased its earnings per share (EPS) by an average of 96% a year, over the last three years (using a line of best fit). Its revenue is down 38% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has China Energy Development Holdings Limited Been A Good Investment?
Most shareholders would probably be pleased with China Energy Development Holdings Limited for providing a total return of 99% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
It appears that China Energy Development Holdings Limited remunerates its CEO below most similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. The strong history of shareholder returns might even have some thinking that Guoqiang Zhao deserves a raise! It's not often we see shareholders do so well, and yet the CEO is paid modestly. The cherry on top would be if company insiders are buying shares with their own money. Shareholders may want to check for free if China Energy Development Holdings insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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