Hebei Construction Group Corporation Limited's (HKG:1727) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• Hebei Construction Group's Annual General Meeting to take place on 30th of June
• Salary of CN¥172.0k is part of CEO Jinfeng Shang's total remuneration
• The total compensation is 58% less than the average for the industry
• Hebei Construction Group's EPS grew by 76% over the past three years while total shareholder loss over the past three years was 56%

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The performance at Hebei Construction Group Corporation Limited (HKG:1727) has been rather lacklustre of late and shareholders may be wondering what CEO Jinfeng Shang is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 30th of June. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for Hebei Construction Group

Comparing Hebei Construction Group Corporation Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Hebei Construction Group Corporation Limited has a market capitalization of HK$775m, and reported total annual CEO compensation of CN¥859k for the year to December 2024. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥172k.

For comparison, other companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥2.1m. This suggests that Jinfeng Shang is paid below the industry median.

On an industry level, around 85% of total compensation represents salary and 15% is other remuneration. Hebei Construction Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Hebei Construction Group Corporation Limited's Growth

Over the past three years, Hebei Construction Group Corporation Limited has seen its earnings per share (EPS) grow by 76% per year. Its revenue is down 25% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Hebei Construction Group Corporation Limited Been A Good Investment?

With a total shareholder return of -56% over three years, Hebei Construction Group Corporation Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders are sitting on a loss is certainly disheartening. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Hebei Construction Group you should be aware of, and 2 of them are potentially serious.

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.