Yahoo Finance Does China New Energy Limited's (LON:CNEL) CEO Salary Reflect Performance?
Zhaoxing Tang is the CEO of China New Energy Limited (LON:CNEL). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for China New Energy
How Does Zhaoxing Tang's Compensation Compare With Similar Sized Companies?
According to our data, China New Energy Limited has a market capitalization of UK£13m, and paid its CEO total annual compensation worth CN¥705k over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at . We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We took a group of companies with market capitalizations below CN¥1.4b, and calculated the median CEO total compensation to be CN¥2.3m.
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.
The graphic below shows how CEO compensation at China New Energy has changed from year to year.
Is China New Energy Limited Growing?
Over the last three years China New Energy Limited has grown its earnings per share (EPS) by an average of 82% per year (using a line of best fit). In the last year, its revenue is up 34%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has China New Energy Limited Been A Good Investment?
Most shareholders would probably be pleased with China New Energy Limited for providing a total return of 97% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
It looks like China New Energy Limited pays its CEO less than similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. The strong history of shareholder returns might even have some thinking that Zhaoxing Tang deserves a raise! It is relatively rare to see a modestly paid CEO when performance is so impressive. It would be even more positive if company insiders are buying shares. Shareholders may want to check for free if China New Energy insiders are buying or selling shares.
Important note: China New Energy 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.
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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