Harbin Bank Co., Ltd.'s (HKG:6138) CEO Will Probably Struggle To See A Pay Rise This Year

Performance at Harbin Bank Co., Ltd. (HKG:6138) has not been particularly rosy recently and shareholders will likely be holding CEO Tianjun Lyu and the board accountable for this. At the upcoming AGM on 21 May 2021, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. The data we gathered below shows that CEO compensation looks acceptable for now.

See our latest analysis for Harbin Bank

Comparing Harbin Bank Co., Ltd.'s CEO Compensation With the industry

According to our data, Harbin Bank Co., Ltd. has a market capitalization of HK$11b, and paid its CEO total annual compensation worth CN¥2.2m over the year to December 2020. We note that's a decrease of 15% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥576k.

For comparison, other companies in the same industry with market capitalizations ranging between HK$7.8b and HK$25b had a median total CEO compensation of CN¥3.2m. This suggests that Tianjun Lyu is paid below the industry median.

Component	2020	2019	Proportion (2020)
Salary	CN¥576k	CN¥581k	26%
Other	CN¥1.7m	CN¥2.1m	74%
Total Compensation	CN¥2.2m	CN¥2.6m	100%

On an industry level, around 58% of total compensation represents salary and 42% is other remuneration. Harbin Bank sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

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

Over the last three years, Harbin Bank Co., Ltd. has shrunk its earnings per share by 48% per year. In the last year, its revenue is down 37%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Harbin Bank Co., Ltd. Been A Good Investment?

With a total shareholder return of -49% over three years, Harbin Bank Co., Ltd. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 2 which don't sit too well with us) in Harbin Bank we think you should know about.

Important note: Harbin 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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