This Is Why Haina Intelligent Equipment International Holdings Limited's (HKG:1645) CEO Compensation Looks Appropriate

Key Insights

• Haina Intelligent Equipment International Holdings to hold its Annual General Meeting on 30th of May
• Total pay for CEO Yiyuan Hong includes CN¥300.0k salary
• The total compensation is 41% less than the average for the industry
• Haina Intelligent Equipment International Holdings' EPS declined by 121% over the past three years while total shareholder return over the past three years was 27%

The performance at Haina Intelligent Equipment International Holdings Limited (HKG:1645) has been rather lacklustre of late and shareholders may be wondering what CEO Yiyuan Hong is planning to do about this. At the next AGM coming up on 30th of May, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

See our latest analysis for Haina Intelligent Equipment International Holdings

How Does Total Compensation For Yiyuan Hong Compare With Other Companies In The Industry?

At the time of writing, our data shows that Haina Intelligent Equipment International Holdings Limited has a market capitalization of HK$778m, and reported total annual CEO compensation of CN¥1.1m for 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¥300k.

On comparing similar-sized companies in the Hong Kong Machinery industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.8m. In other words, Haina Intelligent Equipment International Holdings pays its CEO lower than the industry median.

Component	2023	2022	Proportion (2023)
Salary	CN¥300k	CN¥300k	28%
Other	CN¥775k	CN¥749k	72%
Total Compensation	CN¥1.1m	CN¥1.0m	100%

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. It's interesting to note that Haina Intelligent Equipment International Holdings allocates a smaller portion of compensation to salary 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 Haina Intelligent Equipment International Holdings Limited's Growth Numbers

Over the last three years, Haina Intelligent Equipment International Holdings Limited has shrunk its earnings per share by 121% per year. In the last year, its revenue is down 12%.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Haina Intelligent Equipment International Holdings Limited Been A Good Investment?

With a total shareholder return of 27% over three years, Haina Intelligent Equipment International Holdings Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

While it's true that shareholders have seen decent returns, it's hard to overlook the lack of earnings growth and this makes us wonder if the current returns can continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for Haina Intelligent Equipment International Holdings (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Haina Intelligent Equipment International Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.