Performance at Tonking New Energy Group Holdings Limited (HKG:8326) has been rather uninspiring recently and shareholders may be wondering how CEO Jian Nong Wu plans to fix this. At the next AGM coming up on 23 September 2022, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for Tonking New Energy Group Holdings

Comparing Tonking New Energy Group Holdings Limited's CEO Compensation With The Industry

According to our data, Tonking New Energy Group Holdings Limited has a market capitalization of HK$274m, and paid its CEO total annual compensation worth HK$1.1m over the year to March 2022. That's a notable increase of 26% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$394k.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.7m. That is to say, Jian Nong Wu is paid under the industry median.

On an industry level, around 41% of total compensation represents salary and 59% is other remuneration. In Tonking New Energy Group Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Tonking New Energy Group Holdings Limited's Growth

Over the last three years, Tonking New Energy Group Holdings Limited has shrunk its earnings per share by 30% per year. Its revenue is down 14% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Tonking New Energy Group Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 112% over three years, Tonking New Energy Group Holdings Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean these strong returns may not continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Tonking New Energy Group Holdings (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: Tonking New Energy Group Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.