It Looks Like Qingling Motors Co., Ltd.'s (HKG:1122) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Qingling Motors' Annual General Meeting to take place on 5th of June
• Salary of CN¥349.0k is part of CEO Tatsuya Yasuta's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Qingling Motors' EPS fell by 89% and over the past three years, the total loss to shareholders 62%

Qingling Motors Co., Ltd. (HKG:1122) has not performed well recently and CEO Tatsuya Yasuta will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 5th of June. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Qingling Motors

How Does Total Compensation For Tatsuya Yasuta Compare With Other Companies In The Industry?

Our data indicates that Qingling Motors Co., Ltd. has a market capitalization of HK$1.4b, and total annual CEO compensation was reported as CN¥647k for the year to December 2023. That's a notable increase of 21% on last year. Notably, the salary which is CN¥349.0k, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the Hong Kong Auto industry with market capitalizations ranging between HK$781m and HK$3.1b had a median total CEO compensation of CN¥647k. From this we gather that Tatsuya Yasuta is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	CN¥349k	CN¥330k	54%
Other	CN¥298k	CN¥204k	46%
Total Compensation	CN¥647k	CN¥534k	100%

Talking in terms of the industry, salary represented approximately 48% of total compensation out of all the companies we analyzed, while other remuneration made up 52% of the pie. It's interesting to note that Qingling Motors pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Qingling Motors Co., Ltd.'s Growth

Over the last three years, Qingling Motors Co., Ltd. has shrunk its earnings per share by 89% per year. Its revenue is up 11% over the last year.

Few shareholders would be pleased to read that EPS have declined. 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Qingling Motors Co., Ltd. Been A Good Investment?

With a total shareholder return of -62% over three years, Qingling Motors 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...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Qingling Motors that investors should look into moving forward.

Switching gears from Qingling Motors, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.