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Should You Worry About Silk Road Energy Services Group Limited's (HKG:8250) CEO Pay Cheque?

Simply Wall St

In 2016 Youhua Chen was appointed CEO of Silk Road Energy Services Group Limited (HKG:8250). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

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Check out our latest analysis for Silk Road Energy Services Group

How Does Youhua Chen's Compensation Compare With Similar Sized Companies?

According to our data, Silk Road Energy Services Group Limited has a market capitalization of HK$187m, and pays its CEO total annual compensation worth HK$1.3m. (This is based on the year to June 2018). Notably, the salary of HK$1.3m is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO total compensation was HK$1.5m.

So Youhua Chen is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at Silk Road Energy Services Group, below.

SEHK:8250 CEO Compensation, May 21st 2019

Is Silk Road Energy Services Group Limited Growing?

Silk Road Energy Services Group Limited has increased its earnings per share (EPS) by an average of 16% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 28%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Silk Road Energy Services Group Limited Been A Good Investment?

Since shareholders would have lost about 89% over three years, some Silk Road Energy Services Group Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Youhua Chen is paid around what is normal the leaders of comparable size companies.

We think that the EPS growth is very pleasing, but we find the returns over the last three years to be lacking. Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. So you may want to check if insiders are buying Silk Road Energy Services Group shares with their own money (free access).

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 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. Thank you for reading.