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Does Tonking New Energy Group Holdings Limited's (HKG:8326) CEO Pay Compare Well With Peers?

Simply Wall St

Jian Nong Wu became the CEO of Tonking New Energy Group Holdings Limited (HKG:8326) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Tonking New Energy Group Holdings

How Does Jian Nong Wu's Compensation Compare With Similar Sized Companies?

According to our data, Tonking New Energy Group Holdings Limited has a market capitalization of HK$164m, and paid its CEO total annual compensation worth HK$1.0m over the year to March 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$391k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO total compensation in that group is HK$1.8m.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Tonking New Energy Group Holdings stands. Speaking on an industry level, we can see that nearly 53% of total compensation represents salary, while the remainder of 47% is other remuneration. So it seems like there isn't a significant difference between Tonking New Energy Group Holdings and the broader market, in terms of salary allocation in the overall compensation package.

At first glance this seems like a real positive for shareholders, since Jian Nong Wu is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion. The graphic below shows how CEO compensation at Tonking New Energy Group Holdings has changed from year to year.

SEHK:8326 CEO Compensation April 4th 2020

Is Tonking New Energy Group Holdings Limited Growing?

On average over the last three years, Tonking New Energy Group Holdings Limited has shrunk earnings per share by 21% each year (measured with a line of best fit). In the last year, its revenue is down 84%.

Few shareholders would be pleased to read that earnings per share are lower over three years. 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. 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 Tonking New Energy Group Holdings Limited Been A Good Investment?

With a three year total loss of 90%, Tonking New Energy Group Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

It looks like Tonking New Energy Group Holdings Limited pays its CEO less than similar sized companies.

Shareholders should note that compensation for Jian Nong Wu is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. On another note, we've spotted 5 warning signs for Tonking New Energy Group Holdings that investors should look into moving forward.

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.

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.

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. Thank you for reading.