It's Unlikely That The CEO Of Weihai City Commercial Bank Co., Ltd. (HKG:9677) Will See A Huge Pay Rise This Year

Key Insights

• Weihai City Commercial Bank to hold its Annual General Meeting on 30th of April
• Salary of CN¥702.0k is part of CEO Dongxiao Meng's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Weihai City Commercial Bank's EPS grew by 3.1% and over the past three years, the total loss to shareholders 10%

In the past three years, the share price of Weihai City Commercial Bank Co., Ltd. (HKG:9677) has struggled to generate growth for its shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 30th of April. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Weihai City Commercial Bank

Comparing Weihai City Commercial Bank Co., Ltd.'s CEO Compensation With The Industry

According to our data, Weihai City Commercial Bank Co., Ltd. has a market capitalization of HK$17b, and paid its CEO total annual compensation worth CN¥2.1m over the year to December 2023. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥702k.

On comparing similar companies from the Hong Kong Banks industry with market caps ranging from HK$7.8b to HK$25b, we found that the median CEO total compensation was CN¥2.1m. This suggests that Weihai City Commercial Bank remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	CN¥702k	CN¥702k	34%
Other	CN¥1.4m	CN¥1.4m	66%
Total Compensation	CN¥2.1m	CN¥2.1m	100%

Speaking on an industry level, nearly 63% of total compensation represents salary, while the remainder of 37% is other remuneration. Weihai City Commercial Bank sets aside a smaller share of compensation for salary, in comparison to the overall 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 Weihai City Commercial Bank Co., Ltd.'s Growth Numbers

Over the past three years, Weihai City Commercial Bank Co., Ltd. has seen its earnings per share (EPS) grow by 3.1% per year. Its revenue is up 2.9% over the last year.

We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. 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 Weihai City Commercial Bank Co., Ltd. Been A Good Investment?

With a three year total loss of 10% for the shareholders, Weihai City Commercial Bank Co., Ltd. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At 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 will likely improve performance in the future.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Weihai City Commercial Bank that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.