Is China Gas Holdings Limited’s (HKG:384) CEO Paid Enough Relative To Peers?
Ming Liu became the CEO of China Gas Holdings Limited (HKG:384) in 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for China Gas Holdings
How Does Ming Liu’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that China Gas Holdings Limited has a market cap of HK$144b, and is paying total annual CEO compensation of HK$13m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at HK$7.8m. We took a group of companies with market capitalizations over HK$63b, and calculated the median CEO compensation to be HK$5.4m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).
As you can see, Ming Liu is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean China Gas Holdings 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.
You can see a visual representation of the CEO compensation at China Gas Holdings, below.
Is China Gas Holdings Limited Growing?
Over the last three years China Gas Holdings Limited has grown its earnings per share (EPS) by an average of 38% per year. Its revenue is up 54% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has China Gas Holdings Limited Been A Good Investment?
Boasting a total shareholder return of 170% over three years, China Gas Holdings 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.
In Summary…
We compared the total CEO remuneration paid by China Gas Holdings Limited, and compared it to remuneration at a group of other large companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling China Gas Holdings (free visualization of insider trades).
Or you might prefer examine intently this intuitive graph showing past 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.
