Shareholders Will Probably Hold Off On Increasing Chaowei Power Holdings Limited's (HKG:951) CEO Compensation For The Time Being

Key Insights

• Chaowei Power Holdings' Annual General Meeting to take place on 5th of June
• CEO Mingming Zhou's total compensation includes salary of CN¥1.23m
• The overall pay is comparable to the industry average
• Chaowei Power Holdings' EPS declined by 18% over the past three years while total shareholder loss over the past three years was 15%

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Shareholders of Chaowei Power Holdings Limited (HKG:951) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also poor, despite revenues growing. The AGM coming up on 5th of June will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

Check out our latest analysis for Chaowei Power Holdings

Comparing Chaowei Power Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Chaowei Power Holdings Limited has a market capitalization of HK$1.5b, and reported total annual CEO compensation of CN¥1.2m for the year to December 2024. There was no change in the compensation compared to last year. We note that the salary portion, which stands at CN¥1.23m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Auto Components industry with market capitalizations ranging between HK$784m and HK$3.1b had a median total CEO compensation of CN¥1.2m. This suggests that Chaowei Power Holdings remunerates its CEO largely in line with the industry average. Moreover, Mingming Zhou also holds HK$382m worth of Chaowei Power Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 74% of total compensation represents salary, while the remainder of 26% is other remuneration. Chaowei Power Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Chaowei Power Holdings Limited's Growth

Chaowei Power Holdings Limited has reduced its earnings per share by 18% a year over the last three years. It achieved revenue growth of 25% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. 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. 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 Chaowei Power Holdings Limited Been A Good Investment?

Given the total shareholder loss of 15% over three years, many shareholders in Chaowei Power Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Chaowei Power Holdings pays its CEO a majority of compensation through a salary. The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.

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 4 warning signs for Chaowei Power Holdings (of which 2 make us uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Important note: Chaowei Power Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.