We Think China Bohai Bank Co., Ltd.'s (HKG:9668) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• China Bohai Bank will host its Annual General Meeting on 18th of June
• Total pay for CEO Hongzhi Qu includes CN¥930.0k salary
• The total compensation is 103% higher than the average for the industry
• Over the past three years, China Bohai Bank's EPS fell by 18% and over the past three years, the total loss to shareholders 36%

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Shareholders will probably not be too impressed with the underwhelming results at China Bohai Bank Co., Ltd. (HKG:9668) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 18th of June. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for China Bohai Bank

How Does Total Compensation For Hongzhi Qu Compare With Other Companies In The Industry?

According to our data, China Bohai Bank Co., Ltd. has a market capitalization of HK$16b, and paid its CEO total annual compensation worth CN¥2.6m over the year to December 2024. We note that's a small decrease of 3.9% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥930k.

In comparison with other companies in the Hong Kong Banks industry with market capitalizations ranging from HK$7.8b to HK$25b, the reported median CEO total compensation was CN¥1.3m. This suggests that Hongzhi Qu is paid more than the median for the industry.

On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. In China Bohai Bank's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

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

China Bohai Bank Co., Ltd. has reduced its earnings per share by 18% a year over the last three years. Revenue was pretty flat on last year.

Few shareholders would be pleased to read that EPS have declined. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has China Bohai Bank Co., Ltd. Been A Good Investment?

The return of -36% over three years would not have pleased China Bohai Bank Co., Ltd. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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.

So you may want to check if insiders are buying China Bohai Bank shares with their own money (free access).

Important note: China Bohai 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.