This Is Why Shuanghua Holdings Limited's (HKG:1241) CEO Compensation Looks Appropriate

Key Insights

• Shuanghua Holdings will host its Annual General Meeting on 30th of June
• CEO Ping Zheng's total compensation includes salary of CN¥1.00m
• Total compensation is similar to the industry average
• Shuanghua Holdings' total shareholder return over the past three years was 20% while its EPS grew by 16% over the past three years

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Under the guidance of CEO Ping Zheng, Shuanghua Holdings Limited (HKG:1241) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 30th of June. We present our case of why we think CEO compensation looks fair.

View our latest analysis for Shuanghua Holdings

How Does Total Compensation For Ping Zheng Compare With Other Companies In The Industry?

At the time of writing, our data shows that Shuanghua Holdings Limited has a market capitalization of HK$66m, and reported total annual CEO compensation of CN¥1.1m for the year to December 2024. This was the same as last year. In particular, the salary of CN¥1.00m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Auto Components industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.2m. From this we gather that Ping Zheng is paid around the median for CEOs in the industry. Moreover, Ping Zheng also holds HK$29m worth of Shuanghua Holdings 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 74% of total compensation represents salary and 26% is other remuneration. It's interesting to note that Shuanghua Holdings 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.

A Look at Shuanghua Holdings Limited's Growth Numbers

Over the past three years, Shuanghua Holdings Limited has seen its earnings per share (EPS) grow by 16% per year. Its revenue is down 18% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Shuanghua Holdings Limited Been A Good Investment?

With a total shareholder return of 20% over three years, Shuanghua Holdings Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Shuanghua Holdings that investors should think about before committing capital to this 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.