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Is Towngas China Company Limited's (HKG:1083) CEO Being Overpaid?

Simply Wall St

Peter Wong became the CEO of Towngas China Company Limited (HKG:1083) in 2007. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Towngas China

How Does Peter Wong's Compensation Compare With Similar Sized Companies?

According to our data, Towngas China Company Limited has a market capitalization of HK$16b, and pays its CEO total annual compensation worth HK$12m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at HK$1.2m. We looked at a group of companies with market capitalizations from HK$7.8b to HK$25b, and the median CEO total compensation was HK$4.3m.

It would therefore appear that Towngas China Company Limited pays Peter Wong more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. 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 a visual representation of the CEO compensation at Towngas China, below.

SEHK:1083 CEO Compensation, August 22nd 2019

Is Towngas China Company Limited Growing?

Towngas China Company Limited has increased its earnings per share (EPS) by an average of 15% a year, over the last three years (using a line of best fit). It achieved revenue growth of 23% over the last year.

This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Towngas China Company Limited Been A Good Investment?

With a total shareholder return of 28% over three years, Towngas China Company Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

We compared the total CEO remuneration paid by Towngas China Company Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Towngas China (free visualization of insider trades).

Important note: Towngas China may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.