Shareholders May Be Wary Of Increasing ShenZhen Properties & Resources Development (Group) Ltd.'s (SZSE:000011) CEO Compensation Package

Key Insights

• ShenZhen Properties & Resources Development (Group) will host its Annual General Meeting on 19th of April
• CEO Hangjun Wang's total compensation includes salary of CN¥1.08m
• The total compensation is 38% higher than the average for the industry
• ShenZhen Properties & Resources Development (Group)'s EPS declined by 17% over the past three years while total shareholder loss over the past three years was 30%

Shareholders will probably not be too impressed with the underwhelming results at ShenZhen Properties & Resources Development (Group) Ltd. (SZSE:000011) recently. At the upcoming AGM on 19th of April, 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for ShenZhen Properties & Resources Development (Group)

How Does Total Compensation For Hangjun Wang Compare With Other Companies In The Industry?

According to our data, ShenZhen Properties & Resources Development (Group) Ltd. has a market capitalization of CN¥4.6b, and paid its CEO total annual compensation worth CN¥1.5m over the year to December 2023. We note that's an increase of 25% above last year. Notably, the salary which is CN¥1.08m, represents most of the total compensation being paid.

For comparison, other companies in the Chinese Real Estate industry with market capitalizations ranging between CN¥2.9b and CN¥12b had a median total CEO compensation of CN¥1.1m. Accordingly, our analysis reveals that ShenZhen Properties & Resources Development (Group) Ltd. pays Hangjun Wang north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.1m	CN¥881k	74%
Other	CN¥378k	CN¥282k	26%
Total Compensation	CN¥1.5m	CN¥1.2m	100%

On an industry level, roughly 78% of total compensation represents salary and 22% is other remuneration. Our data reveals that ShenZhen Properties & Resources Development (Group) allocates salary more or less in line with the wider market. 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.

ShenZhen Properties & Resources Development (Group) Ltd.'s Growth

ShenZhen Properties & Resources Development (Group) Ltd. has reduced its earnings per share by 17% a year over the last three years. In the last year, its revenue is down 20%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 ShenZhen Properties & Resources Development (Group) Ltd. Been A Good Investment?

Given the total shareholder loss of 30% over three years, many shareholders in ShenZhen Properties & Resources Development (Group) Ltd. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for ShenZhen Properties & Resources Development (Group) (of which 2 don't sit too well with us!) 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.