Here's Why Shareholders Should Examine Dongguan Rural Commercial Bank Co., Ltd.'s (HKG:9889) CEO Compensation Package More Closely
Key Insights
- Dongguan Rural Commercial Bank to hold its Annual General Meeting on 30th of May
- CEO Qiang Fu's total compensation includes salary of CN¥1.38m
- Total compensation is similar to the industry average
- Dongguan Rural Commercial Bank's three-year loss to shareholders was 45% while its EPS was down 8.9% over the past three years
Dongguan Rural Commercial Bank Co., Ltd. (HKG:9889) has not performed well recently and CEO Qiang Fu will probably need to up their game. At the upcoming AGM on 30th of May, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.
View our latest analysis for Dongguan Rural Commercial Bank
How Does Total Compensation For Qiang Fu Compare With Other Companies In The Industry?
According to our data, Dongguan Rural Commercial Bank Co., Ltd. has a market capitalization of HK$25b, and paid its CEO total annual compensation worth CN¥2.2m over the year to December 2024. That's a notable decrease of 11% on last year. Notably, the salary which is CN¥1.38m, represents most of the total compensation being paid.
In comparison with other companies in the Hong Kong Banks industry with market capitalizations ranging from HK$16b to HK$50b, the reported median CEO total compensation was CN¥1.7m. This suggests that Dongguan Rural Commercial Bank remunerates its CEO largely in line with the industry average. Furthermore, Qiang Fu directly owns HK$1.8m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | CN¥1.4m | CN¥1.4m | 63% |
| Other | CN¥819k | CN¥1.1m | 37% |
| Total Compensation | CN¥2.2m | CN¥2.5m | 100% |
On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. Although there is a difference in how total compensation is set, Dongguan Rural Commercial Bank more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Dongguan Rural Commercial Bank Co., Ltd.'s Growth Numbers
Dongguan Rural Commercial Bank Co., Ltd. has reduced its earnings per share by 8.9% a year over the last three years. It saw its revenue drop 14% over the last year.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Dongguan Rural Commercial Bank Co., Ltd. Been A Good Investment?
The return of -45% over three years would not have pleased Dongguan Rural Commercial Bank Co., Ltd. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
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, the board will get the chance to explain the steps it plans to take to improve business performance.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Dongguan Rural Commercial Bank that investors should look into moving forward.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.