Most Shareholders Will Probably Agree With China Railway Group Limited's (SHSE:601390) CEO Compensation

Key Insights

• China Railway Group will host its Annual General Meeting on 28th of June
• CEO Wenjian Chen's total compensation includes salary of CN¥401.0k
• The overall pay is comparable to the industry average
• China Railway Group's total shareholder return over the past three years was 35% while its EPS grew by 5.5% over the past three years

CEO Wenjian Chen has done a decent job of delivering relatively good performance at China Railway Group Limited (SHSE:601390) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 28th of June. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

See our latest analysis for China Railway Group

Comparing China Railway Group Limited's CEO Compensation With The Industry

According to our data, China Railway Group Limited has a market capitalization of CN¥151b, and paid its CEO total annual compensation worth CN¥1.2m over the year to December 2023. Notably, that's a decrease of 15% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥401k.

In comparison with other companies in the Chinese Construction industry with market capitalizations over CN¥58b, the reported median total CEO compensation was CN¥1.1m. This suggests that China Railway Group remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	CN¥401k	CN¥389k	34%
Other	CN¥770k	CN¥989k	66%
Total Compensation	CN¥1.2m	CN¥1.4m	100%

On an industry level, around 82% of total compensation represents salary and 18% is other remuneration. In China Railway Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

China Railway Group Limited's Growth

China Railway Group Limited's earnings per share (EPS) grew 5.5% per year over the last three years. Its revenue is up 8.3% over the last year.

We'd prefer higher revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has China Railway Group Limited Been A Good Investment?

We think that the total shareholder return of 35%, over three years, would leave most China Railway Group Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

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 identified 2 warning signs for China Railway Group (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com