Key Insights
- Sino Oil and Gas Holdings to hold its Annual General Meeting on 31st of May
- CEO Xiaobing Dai's total compensation includes salary of HK$2.50m
- The total compensation is 67% higher than the average for the industry
- Sino Oil and Gas Holdings' three-year loss to shareholders was 79% while its EPS was down 31% over the past three years
Shareholders will probably not be too impressed with the underwhelming results at Sino Oil and Gas Holdings Limited (HKG:702) recently. At the upcoming AGM on 31st of May, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.
View our latest analysis for Sino Oil and Gas Holdings
How Does Total Compensation For Xiaobing Dai Compare With Other Companies In The Industry?
According to our data, Sino Oil and Gas Holdings Limited has a market capitalization of HK$224m, and paid its CEO total annual compensation worth HK$2.5m over the year to December 2023. This means that the compensation hasn't changed much from last year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$2.5m.
On comparing similar-sized companies in the Hong Kong Oil and Gas industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.5m. Accordingly, our analysis reveals that Sino Oil and Gas Holdings Limited pays Xiaobing Dai north of the industry median. Furthermore, Xiaobing Dai directly owns HK$1.4m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2023 | 2022 | Proportion (2023) |
| Salary | HK$2.5m | HK$2.5m | 100% |
| Other | - | - | - |
| Total Compensation | HK$2.5m | HK$2.5m | 100% |
On an industry level, roughly 92% of total compensation represents salary and 8% is other remuneration. At the company level, Sino Oil and Gas Holdings pays Xiaobing Dai solely through a salary, preferring to go down a conventional route. 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.
Sino Oil and Gas Holdings Limited's Growth
Over the last three years, Sino Oil and Gas Holdings Limited has shrunk its earnings per share by 31% per year. Its revenue is down 32% over the previous year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Sino Oil and Gas Holdings Limited Been A Good Investment?
Few Sino Oil and Gas Holdings Limited shareholders would feel satisfied with the return of -79% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Sino Oil and Gas Holdings pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
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 4 warning signs (and 3 which shouldn't be ignored) in Sino Oil and Gas Holdings we think you should know about.
Important note: Sino Oil and 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.