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Is Tibet Water Resources Ltd. (HKG:1115) Overpaying Its CEO?

Simply Wall St

Dong Wang has been the CEO of Tibet Water Resources Ltd. (HKG:1115) since 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Tibet Water Resources

How Does Dong Wang's Compensation Compare With Similar Sized Companies?

Our data indicates that Tibet Water Resources Ltd. is worth HK$1.2b, and total annual CEO compensation was reported as CN¥1.3m for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth CN¥1.3m. When we examined a selection of companies with market caps ranging from CN¥694m to CN¥2.8b, we found the median CEO total compensation was CN¥2.0m.

Most shareholders would consider it a positive that Dong Wang takes less total compensation than the CEOs of most similar size companies, leaving more 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 Tibet Water Resources, below.

SEHK:1115 CEO Compensation, January 30th 2020

Is Tibet Water Resources Ltd. Growing?

Tibet Water Resources Ltd. has increased its earnings per share (EPS) by an average of 2.1% a year, over the last three years (using a line of best fit). It saw its revenue drop 8.6% over the last year.

I would prefer it if there was revenue growth, but it is good to see EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Tibet Water Resources Ltd. Been A Good Investment?

Given the total loss of 85% over three years, many shareholders in Tibet Water Resources Ltd. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Tibet Water Resources Ltd. is currently paying its CEO below what is normal for companies of its size.

Dong Wang is paid less than CEOs of similar size companies, but growth hasn't been particularly impressive and the total shareholder return over three years would leave many disappointed. I am not concerned by the CEO compensation, but it would be good to see improved performance before pay increases. Shareholders may want to check for free if Tibet Water Resources insiders are buying or selling shares.

If you want to buy a stock that is better than Tibet Water Resources, this free list of high return, low debt companies is a great place to look.

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.

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