Should You Worry About Sinopec Kantons Holdings Limited's (HKG:934) CEO Pay Cheque?
In 2002 Zhijun Ye was appointed CEO of Sinopec Kantons Holdings Limited (HKG:934). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Sinopec Kantons Holdings
How Does Zhijun Ye's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Sinopec Kantons Holdings Limited has a market cap of HK$7.2b, and reported total annual CEO compensation of HK$2.3m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$1.0m. 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$3.8m.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Sinopec Kantons Holdings stands. Speaking on an industry level, we can see that nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. It's interesting to note that Sinopec Kantons Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry.
At first glance this seems like a real positive for shareholders, since Zhijun Ye is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion. You can see, below, how CEO compensation at Sinopec Kantons Holdings has changed over time.
Is Sinopec Kantons Holdings Limited Growing?
Over the last three years Sinopec Kantons Holdings Limited has seen earnings per share (EPS) move in a positive direction by an average of 5.2% per year (using a line of best fit). It saw its revenue drop 13% over the last year.
I generally like to see a little revenue growth, but the improvement in EPS is good. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Shareholders might be interested in this free visualization of analyst forecasts.
Has Sinopec Kantons Holdings Limited Been A Good Investment?
Since shareholders would have lost about 27% over three years, some Sinopec Kantons Holdings 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...
It looks like Sinopec Kantons Holdings Limited pays its CEO less than similar sized companies.
Zhijun Ye is paid less than CEOs of similar size companies, but growth hasn't been particularly impressive and the total shareholder return over three years would leave many disappointed. Many shareholders would probably like to see improvements, but our analysis does not suggest that CEO compensation is too generous. Moving away from CEO compensation for the moment, we've identified 1 warning sign for Sinopec Kantons Holdings that you should be aware of before investing.
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.
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.
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