We Take A Look At Why CNOOC Limited's (HKG:883) CEO Compensation Is Well Earned

Key Insights

• CNOOC will host its Annual General Meeting on 5th of June
• Total pay for CEO Xinhuai Zhou includes CN¥241.0k salary
• The overall pay is comparable to the industry average
• CNOOC's EPS grew by 12% over the past three years while total shareholder return over the past three years was 112%

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We have been pretty impressed with the performance at CNOOC Limited (HKG:883) recently and CEO Xinhuai Zhou deserves a mention for their role in it. Coming up to the next AGM on 5th of June, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for CNOOC

How Does Total Compensation For Xinhuai Zhou Compare With Other Companies In The Industry?

Our data indicates that CNOOC Limited has a market capitalization of HK$890b, and total annual CEO compensation was reported as CN¥1.2m for the year to December 2024. That's a slight decrease of 6.0% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥241k.

For comparison, other companies in the Hong Kong Oil and Gas industry with market capitalizations above HK$63b, reported a median total CEO compensation of CN¥977k. So it looks like CNOOC compensates Xinhuai Zhou in line with the median for the industry.

On an industry level, roughly 83% of total compensation represents salary and 17% is other remuneration. CNOOC pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at CNOOC Limited's Growth Numbers

CNOOC Limited's earnings per share (EPS) grew 12% per year over the last three years. In the last year, its revenue is down 3.4%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has CNOOC Limited Been A Good Investment?

Most shareholders would probably be pleased with CNOOC Limited for providing a total return of 112% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

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 2 warning signs (and 1 which is significant) in CNOOC we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.