Here's Why Shareholders Should Examine Huazhong In-Vehicle Holdings Company Limited's (HKG:6830) CEO Compensation Package More Closely

Key Insights

• Huazhong In-Vehicle Holdings to hold its Annual General Meeting on 3rd of June
• Total pay for CEO Minfeng Zhou includes CN¥1.38m salary
• The total compensation is 83% higher than the average for the industry
• Huazhong In-Vehicle Holdings' EPS declined by 6.1% over the past three years while total shareholder loss over the past three years was 91%

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Shareholders will probably not be too impressed with the underwhelming results at Huazhong In-Vehicle Holdings Company Limited (HKG:6830) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 3rd 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Huazhong In-Vehicle Holdings

How Does Total Compensation For Minfeng Zhou Compare With Other Companies In The Industry?

At the time of writing, our data shows that Huazhong In-Vehicle Holdings Company Limited has a market capitalization of HK$419m, and reported total annual CEO compensation of CN¥2.1m for the year to December 2024. We note that's an increase of 8.0% above last year. In particular, the salary of CN¥1.38m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Auto Components industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.1m. This suggests that Minfeng Zhou is paid more than the median for the industry. Furthermore, Minfeng Zhou directly owns HK$313m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. Huazhong In-Vehicle Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Huazhong In-Vehicle Holdings Company Limited's Growth Numbers

Over the last three years, Huazhong In-Vehicle Holdings Company Limited has shrunk its earnings per share by 6.1% per year. In the last year, its revenue changed by just 0.2%.

Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Huazhong In-Vehicle Holdings Company Limited Been A Good Investment?

The return of -91% over three years would not have pleased Huazhong In-Vehicle Holdings Company Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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 2 warning signs for Huazhong In-Vehicle Holdings (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Huazhong In-Vehicle Holdings, 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.

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

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.