Jiangxi Bank Co., Ltd.'s (HKG:1916) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Jiangxi Bank to hold its Annual General Meeting on 27th of June
• CEO Xiaolin Luo's total compensation includes salary of CN¥824.0k
• Total compensation is similar to the industry average
• Jiangxi Bank's three-year loss to shareholders was 2.8% while its EPS was down 30% over the past three years

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Shareholders will probably not be too impressed with the underwhelming results at Jiangxi Bank Co., Ltd. (HKG:1916) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 27th 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. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Jiangxi Bank

Comparing Jiangxi Bank Co., Ltd.'s CEO Compensation With The Industry

At the time of writing, our data shows that Jiangxi Bank Co., Ltd. has a market capitalization of HK$4.9b, and reported total annual CEO compensation of CN¥1.0m for the year to December 2024. That's a notable increase of 62% on last year. In particular, the salary of CN¥824.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Banks industry with market capitalizations ranging from HK$3.1b to HK$13b, the reported median CEO total compensation was CN¥1.3m. From this we gather that Xiaolin Luo is paid around the median for CEOs in the industry.

On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. Jiangxi Bank pays out 80% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Jiangxi Bank Co., Ltd.'s Growth Numbers

Over the last three years, Jiangxi Bank Co., Ltd. has shrunk its earnings per share by 30% per year. Its revenue is down 9.7% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Jiangxi Bank Co., Ltd. Been A Good Investment?

Since shareholders would have lost about 2.8% over three years, some Jiangxi Bank Co., Ltd. investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for Jiangxi Bank you should be aware of, and 1 of them is potentially serious.

Important note: Jiangxi Bank 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.