Should Shareholders Reconsider Goldwind Science And Technology Co., Ltd.'s (SZSE:002202) CEO Compensation Package?

Key Insights

• Goldwind Science And Technology's Annual General Meeting to take place on 25th of June
• CEO Zhigang Cao's total compensation includes salary of CN¥1.82m
• The total compensation is 155% higher than the average for the industry
• Goldwind Science And Technology's EPS declined by 54% over the past three years while total shareholder loss over the past three years was 36%

Goldwind Science And Technology Co., Ltd. (SZSE:002202) has not performed well recently and CEO Zhigang Cao will probably need to up their game. At the upcoming AGM on 25th of June, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Goldwind Science And Technology

Comparing Goldwind Science And Technology Co., Ltd.'s CEO Compensation With The Industry

At the time of writing, our data shows that Goldwind Science And Technology Co., Ltd. has a market capitalization of CN¥28b, and reported total annual CEO compensation of CN¥4.4m for the year to December 2023. Notably, that's an increase of 14% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥1.8m.

On comparing similar companies from the Chinese Electrical industry with market caps ranging from CN¥15b to CN¥46b, we found that the median CEO total compensation was CN¥1.7m. Accordingly, our analysis reveals that Goldwind Science And Technology Co., Ltd. pays Zhigang Cao north of the industry median. Furthermore, Zhigang Cao directly owns CN¥91m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.8m	CN¥1.8m	41%
Other	CN¥2.6m	CN¥2.1m	59%
Total Compensation	CN¥4.4m	CN¥3.9m	100%

On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. Goldwind Science And Technology sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Goldwind Science And Technology Co., Ltd.'s Growth Numbers

Over the last three years, Goldwind Science And Technology Co., Ltd. has shrunk its earnings per share by 54% per year. It achieved revenue growth of 14% over the last year.

Overall this is not a very positive result for shareholders. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Goldwind Science And Technology Co., Ltd. Been A Good Investment?

With a total shareholder return of -36% over three years, Goldwind Science And Technology Co., Ltd. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too 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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Goldwind Science And Technology (of which 2 are a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

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.

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