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Guohua Geng has been the CEO of Add New Energy Investment Holdings Group Limited (HKG:2623) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Guohua Geng's Compensation Compare With Similar Sized Companies?
Our data indicates that Add New Energy Investment Holdings Group Limited is worth HK$570m, and total annual CEO compensation is CN¥522k. (This figure is for the year to December 2018). That's actually a decrease on the year before. It is worth noting that the CEO compensation consists almost entirely of the salary, worth CN¥507k. We examined a group of similar sized companies, with market capitalizations of below CN¥1.4b. The median CEO total compensation in that group is CN¥1.5m.
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.
The graphic below shows how CEO compensation at Add New Energy Investment Holdings Group has changed from year to year.
Is Add New Energy Investment Holdings Group Limited Growing?
Over the last three years Add New Energy Investment Holdings Group Limited has grown its earnings per share (EPS) by an average of 49% per year (using a line of best fit). Its revenue is up 617% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Add New Energy Investment Holdings Group Limited Been A Good Investment?
With a three year total loss of 4.9%, Add New Energy Investment Holdings Group Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Add New Energy Investment Holdings Group Limited is currently paying its CEO below what is normal for companies of its size. Since the business is growing, many would argue this suggests the pay is modest. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we would not say that Guohua Geng is generously paid, it would be good to see an improvement in business performance before too an increase in pay.
When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. Shareholders may want to check for free if Add New Energy Investment Holdings Group insiders are buying or selling shares.
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.
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 email@example.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.