We Think Shareholders May Want To Consider A Review Of China Aircraft Leasing Group Holdings Limited's (HKG:1848) CEO Compensation Package

The results at China Aircraft Leasing Group Holdings Limited (HKG:1848) have been quite disappointing recently and CEO Mike Poon bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 07 May 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for China Aircraft Leasing Group Holdings

Comparing China Aircraft Leasing Group Holdings Limited's CEO Compensation With the industry

Our data indicates that China Aircraft Leasing Group Holdings Limited has a market capitalization of HK$4.5b, and total annual CEO compensation was reported as HK$6.3m for the year to December 2020. That's a notable decrease of 61% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$1.7m.

In comparison with other companies in the industry with market capitalizations ranging from HK$1.6b to HK$6.2b, the reported median CEO total compensation was HK$2.5m. This suggests that Mike Poon is paid more than the median for the industry. Furthermore, Mike Poon directly owns HK$103m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	HK$1.7m	HK$1.7m	28%
Other	HK$4.6m	HK$15m	72%
Total Compensation	HK$6.3m	HK$16m	100%

On an industry level, around 94% of total compensation represents salary and 6% is other remuneration. In China Aircraft Leasing Group Holdings' 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 Aircraft Leasing Group Holdings Limited's Growth

Over the last three years, China Aircraft Leasing Group Holdings Limited has shrunk its earnings per share by 24% per year. In the last year, its revenue is up 3.9%.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has China Aircraft Leasing Group Holdings Limited Been A Good Investment?

Since shareholders would have lost about 4.1% over three years, some China Aircraft Leasing Group Holdings Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 5 warning signs for China Aircraft Leasing Group Holdings (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

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. 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.
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