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Should You Worry About Hanwei Energy Services Corp’s (TSE:HE) CEO Pay?

Fulai Lang has been the CEO of Hanwei Energy Services Corp (TSE:HE) since 2006. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Hanwei Energy Services

How Does Fulai Lang’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Hanwei Energy Services Corp has a market cap of CA$4m, and is paying total annual CEO compensation of CA$125k. That’s actually a decrease on the year before. We took a group of companies with market capitalizations below CA$263m, and calculated the median CEO compensation to be CA$156k.

That means Fulai Lang receives fairly typical remuneration for the CEO of a company that size. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see, below, how CEO compensation at Hanwei Energy Services has changed over time.

TSX:HE CEO Compensation November 7th 18

Is Hanwei Energy Services Corp Growing?

Over the last three years Hanwei Energy Services Corp has grown its earnings per share (EPS) by an average of 42% per year. In the last year, its revenue is down -9.3%.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end.

We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Hanwei Energy Services Corp Been A Good Investment?

With a three year total loss of 67%, Hanwei Energy Services Corp would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

Fulai Lang is paid around what is normal the leaders of comparable size companies.

We think that the EPS growth is very pleasing, but it’s disappointing to see negative shareholder returns over three years. Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. Shareholders may want to check for free if Hanwei Energy Services Corp insiders are buying or selling shares.

Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.