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In 2016 Hongbao Tian was appointed CEO of Huadian Power International Corporation Limited (HKG:1071). 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 method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Huadian Power International
How Does Hongbao Tian's Compensation Compare With Similar Sized Companies?
Our data indicates that Huadian Power International Corporation Limited is worth HK$42b, and total annual CEO compensation is CN¥784k. (This number is for the twelve months until December 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CN¥338k. We examined companies with market caps from CN¥28b to CN¥83b, and discovered that the median CEO total compensation of that group was CN¥3.9m.
Most shareholders would consider it a positive that Hongbao Tian takes less total compensation than the CEOs of most similar size companies, leaving more 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 Huadian Power International, below.
Is Huadian Power International Corporation Limited Growing?
Over the last three years Huadian Power International Corporation Limited has shrunk its earnings per share by an average of 68% per year (measured with a line of best fit). In the last year, its revenue is up 8.4%.
Few shareholders would be pleased to read that earnings per share are lower 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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Huadian Power International Corporation Limited Been A Good Investment?
Given the total loss of 9.7% over three years, many shareholders in Huadian Power International Corporation Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.