Yahoo Finance Does Hanwei Energy Services Corp.'s (TSE:HE) CEO Salary Reflect Performance?
Fulai Lang has been the CEO of Hanwei Energy Services Corp. (TSE:HE) since 2006. 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. 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 Hanwei Energy Services
How Does Fulai Lang's Compensation Compare With Similar Sized Companies?
According to our data, Hanwei Energy Services Corp. has a market capitalization of CA$1.9m, and paid its CEO total annual compensation worth CA$138k over the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at CA$125k. We looked at a group of companies with market capitalizations under CA$263m, and the median CEO total compensation was CA$224k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Hanwei Energy Services, below.
Is Hanwei Energy Services Corp. Growing?
Hanwei Energy Services Corp. has reduced its earnings per share by an average of 25% a year, over the last three years (measured with a line of best fit). Its revenue is up 7.9% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Hanwei Energy Services Corp. Been A Good Investment?
With a three year total loss of 78%, Hanwei Energy Services Corp. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
It looks like Hanwei Energy Services Corp. pays its CEO less than similar sized companies.
Shareholders should note that compensation for Fulai Lang is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Hanwei Energy Services (free visualization of insider trades).
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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