As many shareholders of Yuan Heng Gas Holdings Limited (HKG:332) will be aware, they have not made a gain on their investment in the past three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 26 September 2022. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Yuan Heng Gas Holdings

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

Our data indicates that Yuan Heng Gas Holdings Limited has a market capitalization of HK$2.9b, and total annual CEO compensation was reported as CN¥1.5m for the year to March 2022. This means that the compensation hasn't changed much from last year. Notably, the salary which is CN¥770.0k, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from HK$1.6b to HK$6.3b, the reported median CEO total compensation was CN¥1.1m. Accordingly, our analysis reveals that Yuan Heng Gas Holdings Limited pays Jianqing Wang north of the industry median. Furthermore, Jianqing Wang directly owns HK$1.9b worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 88% of total compensation represents salary and 12% is other remuneration. It's interesting to note that Yuan Heng Gas Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Yuan Heng Gas Holdings Limited's Growth

Over the past three years, Yuan Heng Gas Holdings Limited has seen its earnings per share (EPS) grow by 31% per year. It achieved revenue growth of 34% over the last year.

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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Yuan Heng Gas Holdings Limited Been A Good Investment?

Given the total shareholder loss of 10.0% over three years, many shareholders in Yuan Heng Gas Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Yuan Heng Gas Holdings that you should be aware of before investing.

Important note: Yuan Heng Gas 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.