Is China Everbright Greentech Limited's (HKG:1257) CEO Paid Enough Relative To Peers?

Xiaodong Qian has been the CEO of China Everbright Greentech Limited (HKG:1257) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for China Everbright Greentech

How Does Xiaodong Qian's Compensation Compare With Similar Sized Companies?

Our data indicates that China Everbright Greentech Limited is worth HK$5.7b, and total annual CEO compensation was reported as HK$5.4m for the year to December 2019. That's a modest increase of 7.7% on the prior year year. While we always look at total compensation first, we note that the salary component is less, at HK$2.0m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from HK$3.1b to HK$12b, and the median CEO total compensation was HK$3.9m.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where China Everbright Greentech stands. Speaking on an industry level, we can see that nearly 41% of total compensation represents salary, while the remainder of 59% is other remuneration. Our data reveals that China Everbright Greentech allocates salary in line with the wider market.

As you can see, Xiaodong Qian is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean China Everbright Greentech Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. The graphic below shows how CEO compensation at China Everbright Greentech has changed from year to year.

Is China Everbright Greentech Limited Growing?

Over the last three years China Everbright Greentech Limited has seen earnings per share (EPS) move in a positive direction by an average of 20% per year (using a line of best fit). Its revenue is up 33% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Shareholders might be interested in this free visualization of analyst forecasts.

Has China Everbright Greentech Limited Been A Good Investment?

With a three year total loss of 47%, China Everbright Greentech Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at China Everbright Greentech Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is moving in the right direction, we'd say shareholders would want better returns before the CEO is paid much more. On another note, China Everbright Greentech has 4 warning signs (and 2 which are a bit unpleasant) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.