Is GCL-Poly Energy Holdings Limited's (HKG:3800) CEO Salary Justified?

Simply Wall St

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Zhanjun Zhu has been the CEO of GCL-Poly Energy Holdings Limited (HKG:3800) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for GCL-Poly Energy Holdings

How Does Zhanjun Zhu's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that GCL-Poly Energy Holdings Limited has a market cap of HK$8.7b, and is paying total annual CEO compensation of CN¥6.3m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥4.5m. When we examined a selection of companies with market caps ranging from CN¥2.7b to CN¥11b, we found the median CEO total compensation was CN¥3.0m.

As you can see, Zhanjun Zhu is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean GCL-Poly Energy Holdings Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at GCL-Poly Energy Holdings has changed over time.

SEHK:3800 CEO Compensation, July 12th 2019

Is GCL-Poly Energy Holdings Limited Growing?

On average over the last three years, GCL-Poly Energy Holdings Limited has shrunk earnings per share by 54% each year (measured with a line of best fit). Its revenue is down -14% over last year.

Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has GCL-Poly Energy Holdings Limited Been A Good Investment?

Given the total loss of 60% over three years, many shareholders in GCL-Poly Energy Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at GCL-Poly Energy Holdings Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.

Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! So you may want to check if insiders are buying GCL-Poly Energy Holdings shares with their own money (free access).

If you want to buy a stock that is better than GCL-Poly Energy Holdings, this free list of high return, low debt companies is a great place to look.

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.