In 2013 Zhao Yongqi was appointed CEO of Kunlun Energy Company Limited (HKG:135). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Zhao Yongqi's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Kunlun Energy Company Limited has a market cap of HK$60b, and reported total annual CEO compensation of CN¥795k for the year to December 2018. Notably, the salary of CN¥772k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations from CN¥28b to CN¥84b, and the median CEO total compensation was CN¥4.3m.
A first glance this seems like a real positive for shareholders, since Zhao Yongqi is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Kunlun Energy has changed from year to year.
Is Kunlun Energy Company Limited Growing?
Over the last three years Kunlun Energy Company Limited has grown its earnings per share (EPS) by an average of 54% per year (using a line of best fit). It achieved revenue growth of 12% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.
Has Kunlun Energy Company Limited Been A Good Investment?
Boasting a total shareholder return of 35% over three years, Kunlun Energy Company Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It appears that Kunlun Energy Company 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 pleasing shareholder returns are the cherry on top; you might even consider that Zhao Yongqi deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Kunlun Energy.
Important note: Kunlun Energy may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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 firstname.lastname@example.org. 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.