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How Much Is Hanwei Energy Services Corp. (TSE:HE) CEO Getting Paid?

Fulai Lang has been the CEO of Hanwei Energy Services Corp. (TSE:HE) since 2006, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Hanwei Energy Services

How Does Total Compensation For Fulai Lang Compare With Other Companies In The Industry?

At the time of writing, our data shows that Hanwei Energy Services Corp. has a market capitalization of CA$2.9m, and reported total annual CEO compensation of CA$120k for the year to March 2020. That's a notable decrease of 13% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth CA$120k.

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For comparison, other companies in the industry with market capitalizations below CA$261m, reported a median total CEO compensation of CA$898k. Accordingly, Hanwei Energy Services pays its CEO under the industry median. What's more, Fulai Lang holds CA$521k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2020

2019

Proportion (2020)

Salary

CA$120k

CA$125k

100%

Other

-

CA$13k

-

Total Compensation

CA$120k

CA$138k

100%

On an industry level, around 32% of total compensation represents salary and 68% is other remuneration. On a company level, Hanwei Energy Services prefers to reward its CEO through a salary, opting not to pay Fulai Lang through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

A Look at Hanwei Energy Services Corp.'s Growth Numbers

Over the last three years, Hanwei Energy Services Corp. has shrunk its earnings per share by 26% per year. It saw its revenue drop 29% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Hanwei Energy Services Corp. Been A Good Investment?

With a three year total loss of 50% for the shareholders, Hanwei Energy Services Corp. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Hanwei Energy Services pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Fulai is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. EPS growth has failed to impress us, and the same can be said about shareholder returns. It's tough to say that Fulai is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for Hanwei Energy Services you should be aware of, and 2 of them shouldn't be ignored.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.