Shareholders May Be More Conservative With Shunfeng International Clean Energy Limited's (HKG:1165) CEO Compensation For Now

Key Insights

• Shunfeng International Clean Energy's Annual General Meeting to take place on 20th of June
• Total pay for CEO Yu Wang includes CN¥1.83m salary
• The overall pay is 765% above the industry average
• Shunfeng International Clean Energy's EPS grew by 30% over the past three years while total shareholder loss over the past three years was 69%

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The underwhelming share price performance of Shunfeng International Clean Energy Limited (HKG:1165) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 20th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Shunfeng International Clean Energy

How Does Total Compensation For Yu Wang Compare With Other Companies In The Industry?

At the time of writing, our data shows that Shunfeng International Clean Energy Limited has a market capitalization of HK$81m, and reported total annual CEO compensation of CN¥1.8m for the year to December 2024. This means that the compensation hasn't changed much from last year. In particular, the salary of CN¥1.83m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Renewable Energy industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥213k. This suggests that Yu Wang is paid more than the median for the industry. Moreover, Yu Wang also holds HK$438k worth of Shunfeng International Clean Energy stock directly under their own name.

Component	2024	2023	Proportion (2024)
Salary	CN¥1.8m	CN¥1.8m	99%
Other	CN¥16k	CN¥16k	1%
Total Compensation	CN¥1.8m	CN¥1.8m	100%

On an industry level, around 46% of total compensation represents salary and 54% is other remuneration. Shunfeng International Clean Energy is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to 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.

A Look at Shunfeng International Clean Energy Limited's Growth Numbers

Over the past three years, Shunfeng International Clean Energy Limited has seen its earnings per share (EPS) grow by 30% per year. It saw its revenue drop 33% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Shunfeng International Clean Energy Limited Been A Good Investment?

With a total shareholder return of -69% over three years, Shunfeng International Clean Energy Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shunfeng International Clean Energy pays its CEO a majority of compensation through a salary. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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. We did our research and identified 3 warning signs (and 2 which shouldn't be ignored) in Shunfeng International Clean Energy we think you should know about.

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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.