Hao Tian International Construction Investment Group Limited's (HKG:1341) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Hao Tian International Construction Investment Group will host its Annual General Meeting on 19th of September
• Salary of HK$2.50m is part of CEO Eric Fok's total remuneration
• The total compensation is similar to the average for the industry
• Hao Tian International Construction Investment Group's EPS declined by 51% over the past three years while total shareholder loss over the past three years was 17%

Hao Tian International Construction Investment Group Limited (HKG:1341) has not performed well recently and CEO Eric Fok will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 19th of September. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Hao Tian International Construction Investment Group

Comparing Hao Tian International Construction Investment Group Limited's CEO Compensation With The Industry

Our data indicates that Hao Tian International Construction Investment Group Limited has a market capitalization of HK$3.0b, and total annual CEO compensation was reported as HK$2.8m for the year to March 2024. We note that's a decrease of 26% compared to last year. We note that the salary portion, which stands at HK$2.50m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Trade Distributors industry with market capitalizations ranging from HK$1.6b to HK$6.2b, the reported median CEO total compensation was HK$2.6m. From this we gather that Eric Fok is paid around the median for CEOs in the industry.

Component	2024	2023	Proportion (2024)
Salary	HK$2.5m	HK$2.5m	89%
Other	HK$300k	HK$1.3m	11%
Total Compensation	HK$2.8m	HK$3.8m	100%

Speaking on an industry level, nearly 94% of total compensation represents salary, while the remainder of 6% is other remuneration. Although there is a difference in how total compensation is set, Hao Tian International Construction Investment Group more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Hao Tian International Construction Investment Group Limited's Growth

Over the last three years, Hao Tian International Construction Investment Group Limited has shrunk its earnings per share by 51% per year. In the last year, its revenue is down 30%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Hao Tian International Construction Investment Group Limited Been A Good Investment?

With a three year total loss of 17% for the shareholders, Hao Tian International Construction Investment Group Limited would certainly have some dissatisfied 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Hao Tian International Construction Investment Group that investors should think about before committing capital to this stock.

Important note: Hao Tian International Construction Investment 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.