We Think Shareholders May Consider Being More Generous With ZTE Corporation's (SZSE:000063) CEO Compensation Package

Key Insights

• ZTE will host its Annual General Meeting on 28th of March
• Total pay for CEO Ziyang Xu includes CN¥1.77m salary
• Total compensation is 90% below industry average
• ZTE's total shareholder return over the past three years was 46% while its EPS grew by 6.3% over the past three years

Shareholders will be pleased by the robust performance of ZTE Corporation (SZSE:000063) recently and this will be kept in mind in the upcoming AGM on 28th of March. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

Check out our latest analysis for ZTE

How Does Total Compensation For Ziyang Xu Compare With Other Companies In The Industry?

At the time of writing, our data shows that ZTE Corporation has a market capitalization of CN¥159b, and reported total annual CEO compensation of CN¥9.8m for the year to December 2024. We note that's a decrease of 13% compared to last year. 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 in the Chinese Communications industry with market capitalizations above CN¥58b, we found that the median total CEO compensation was CN¥99m. This suggests that Ziyang Xu is paid below the industry median. Moreover, Ziyang Xu also holds CN¥5.9m worth of ZTE stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. It's interesting to note that ZTE allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ZTE Corporation's Growth

Over the past three years, ZTE Corporation has seen its earnings per share (EPS) grow by 6.3% per year. Its revenue is down 2.4% over the previous year.

We generally like to see a little revenue growth, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 ZTE Corporation Been A Good Investment?

Boasting a total shareholder return of 46% over three years, ZTE Corporation has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's overall performance, while not bad, could be better. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. 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 a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for ZTE that investors should think about before committing capital to this stock.

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.