It's Unlikely That The CEO Of China Environmental Resources Group Limited (HKG:1130) Will See A Huge Pay Rise This Year

Key Insights

• China Environmental Resources Group to hold its Annual General Meeting on 4th of December
• CEO Chi Hang Yeung's total compensation includes salary of HK$250.0k
• The overall pay is comparable to the industry average
• Over the past three years, China Environmental Resources Group's EPS grew by 35% and over the past three years, the total loss to shareholders 1.6%

As many shareholders of China Environmental Resources Group Limited (HKG:1130) will be aware, they have not made a gain on their investment in the past three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 4th of December. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for China Environmental Resources Group

How Does Total Compensation For Chi Hang Yeung Compare With Other Companies In The Industry?

At the time of writing, our data shows that China Environmental Resources Group Limited has a market capitalization of HK$124m, and reported total annual CEO compensation of HK$1.8m for the year to June 2023. Notably, that's an increase of 16% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$250k.

In comparison with other companies in the Hong Kong Trade Distributors industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.9m. From this we gather that Chi Hang Yeung is paid around the median for CEOs in the industry. What's more, Chi Hang Yeung holds HK$31m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	HK$250k	-	14%
Other	HK$1.6m	HK$1.6m	86%
Total Compensation	HK$1.8m	HK$1.6m	100%

On an industry level, roughly 92% of total compensation represents salary and 8% is other remuneration. In China Environmental Resources Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

China Environmental Resources Group Limited's Growth

China Environmental Resources Group Limited has seen its earnings per share (EPS) increase by 35% a year over the past three years. Its revenue is down 9.4% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has China Environmental Resources Group Limited Been A Good Investment?

With a three year total loss of 1.6% for the shareholders, China Environmental Resources Group Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 3 warning signs for China Environmental Resources Group you should be aware of, and 2 of them are potentially serious.

Important note: China Environmental Resources Group 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.