Should Shareholders Have Second Thoughts About A Pay Rise For Hebei Construction Group Corporation Limited's (HKG:1727) CEO This Year?

Key Insights

• Hebei Construction Group to hold its Annual General Meeting on 24th of June
• Total pay for CEO Jinfeng Shang includes CN¥175.0k salary
• The total compensation is 57% less than the average for the industry
• Hebei Construction Group's EPS declined by 39% over the past three years while total shareholder loss over the past three years was 76%

Performance at Hebei Construction Group Corporation Limited (HKG:1727) has not been particularly rosy recently and shareholders will likely be holding CEO Jinfeng Shang and the board accountable for this. The next AGM coming up on 24th of June will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. From our analysis below, we think CEO compensation looks appropriate for now.

View our latest analysis for Hebei Construction Group

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

According to our data, Hebei Construction Group Corporation Limited has a market capitalization of HK$1.0b, and paid its CEO total annual compensation worth CN¥860k over the year to December 2023. We note that's a decrease of 11% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥175k.

In comparison with other companies in the Hong Kong Construction industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥2.0m. Accordingly, Hebei Construction Group pays its CEO under the industry median.

Component	2023	2022	Proportion (2023)
Salary	CN¥175k	CN¥174k	20%
Other	CN¥685k	CN¥791k	80%
Total Compensation	CN¥860k	CN¥965k	100%

Talking in terms of the industry, salary represented approximately 83% of total compensation out of all the companies we analyzed, while other remuneration made up 17% of the pie. In Hebei Construction Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader 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

Hebei Construction Group Corporation Limited has reduced its earnings per share by 39% a year over the last three years. In the last year, its revenue is down 16%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Hebei Construction Group Corporation Limited Been A Good Investment?

Few Hebei Construction Group Corporation Limited shareholders would feel satisfied with the return of -76% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Hebei Construction Group you should be aware of, and 2 of them are a bit unpleasant.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com