Richard He became the CEO of Helios Energy Limited (ASX:HE8) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Helios Energy.

See our latest analysis for Helios Energy

Comparing Helios Energy Limited's CEO Compensation With the industry

Our data indicates that Helios Energy Limited has a market capitalization of AU$240m, and total annual CEO compensation was reported as AU$357k for the year to June 2020. That's a modest increase of 6.5% on the prior year. Notably, the salary of AU$357k is the entirety of the CEO compensation.

On examining similar-sized companies in the industry with market capitalizations between AU$133m and AU$531m, we discovered that the median CEO total compensation of that group was AU$821k. That is to say, Richard He is paid under the industry median.

Component 2020 2019 Proportion (2020) Salary AU$357k AU$336k 100% Other - - - Total Compensation AU$357k AU$336k 100%

On an industry level, roughly 76% of total compensation represents salary and 24% is other remuneration. At the company level, Helios Energy pays Richard He 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. ceo-compensation

A Look at Helios Energy Limited's Growth Numbers

Helios Energy Limited has reduced its earnings per share by 65% a year over the last three years. It saw its revenue drop 54% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Helios Energy Limited Been A Good Investment?

Boasting a total shareholder return of 118% over three years, Helios Energy 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...

Helios Energy rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Helios Energy pays its CEO lower than the norm for similar-sized companies belonging to the same industry. And while EPS growth is negative, shareholder returns have been healthy recently. Although we'd like to see positive EPS growth, we'd argue the remuneration is modest, based on our observations.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for Helios Energy that investors should look into moving forward.

Important note: Helios Energy 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.

This article by Simply Wall St is general in nature. 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.

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