How Much Is China Nonferrous Gold's (LON:CNG) CEO Getting Paid?
Lixian Yu has been the CEO of China Nonferrous Gold Limited (LON:CNG) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for China Nonferrous Gold.
View our latest analysis for China Nonferrous Gold
How Does Total Compensation For Lixian Yu Compare With Other Companies In The Industry?
Our data indicates that China Nonferrous Gold Limited has a market capitalization of UK£61m, and total annual CEO compensation was reported as US$228k for the year to December 2019. That's a notable decrease of 23% on last year. Notably, the salary of US$228k is the entirety of the CEO compensation.
For comparison, other companies in the industry with market capitalizations below UK£153m, reported a median total CEO compensation of US$196k. From this we gather that Lixian Yu is paid around the median for CEOs in the industry. Furthermore, Lixian Yu directly owns UK£47k worth of shares in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$228k | US$296k | 100% |
Other | - | - | - |
Total Compensation | US$228k | US$296k | 100% |
On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. On a company level, China Nonferrous Gold prefers to reward its CEO through a salary, opting not to pay Lixian Yu through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at China Nonferrous Gold Limited's Growth Numbers
Over the last three years, China Nonferrous Gold Limited has shrunk its earnings per share by 7.6% per year. Its revenue is up 174% over the last year.
The decrease in earnings could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 China Nonferrous Gold Limited Been A Good Investment?
Since shareholders would have lost about 7.9% over three years, some China Nonferrous Gold Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
China Nonferrous Gold rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, China Nonferrous Gold pays its CEO in line with similar-sized companies belonging to the same industry. However, revenues have increased over the past year, a positive sign for the company. In contrast, over the same time span, shareholder returns are negative. EPS growth is also negative, adding insult to injury. We'd say CEO compensation isn't unfair, but shareholders may be wary of a bump in pay before the company substantially improves overall performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for China Nonferrous Gold (of which 2 make us uncomfortable!) that you should know about in order to have a holistic understanding of the stock.
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.
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.
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