Key Insights

• Towngas Smart Energy's Annual General Meeting to take place on 29th of May
• Salary of HK$1.34m is part of CEO Peter Wong's total remuneration
• The total compensation is 828% higher than the average for the industry
• Towngas Smart Energy's three-year loss to shareholders was 29% while its EPS was down 1.8% over the past three years

Towngas Smart Energy Company Limited (HKG:1083) has not performed well recently and CEO Peter Wong will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 29th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

How Does Total Compensation For Peter Wong Compare With Other Companies In The Industry?

According to our data, Towngas Smart Energy Company Limited has a market capitalization of HK$11b, and paid its CEO total annual compensation worth HK$16m over the year to December 2023. That's a notable increase of 70% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$1.3m.

In comparison with other companies in the Hong Kong Gas Utilities industry with market capitalizations ranging from HK$7.8b to HK$25b, the reported median CEO total compensation was HK$1.7m. Hence, we can conclude that Peter Wong is remunerated higher than the industry median. Furthermore, Peter Wong directly owns HK$23m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 67% of total compensation out of all the companies we analyzed, while other remuneration made up 33% of the pie. Towngas Smart Energy pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Towngas Smart Energy Company Limited's Growth Numbers

Over the last three years, Towngas Smart Energy Company Limited has shrunk its earnings per share by 1.8% per year. Its revenue is down 1.2% over the previous year.

The lack of EPS growth is certainly uninspiring. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Towngas Smart Energy Company Limited Been A Good Investment?

Given the total shareholder loss of 29% over three years, many shareholders in Towngas Smart Energy Company Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which is concerning) in Towngas Smart 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.