Here's Why Some Shareholders May Not Be Too Generous With Zall Smart Commerce Group Ltd.'s (HKG:2098) CEO Compensation This Year

Key Insights

• Zall Smart Commerce Group's Annual General Meeting to take place on 28th of May
• Salary of CN¥486.0k is part of CEO Zhi Yan's total remuneration
• The total compensation is 51% less than the average for the industry
• Zall Smart Commerce Group's three-year loss to shareholders was 30% while its EPS was down 7.9% over the past three years

The disappointing performance at Zall Smart Commerce Group Ltd. (HKG:2098) will make some shareholders rather disheartened. The next AGM coming up on 28th of May 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 Zall Smart Commerce Group

How Does Total Compensation For Zhi Yan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Zall Smart Commerce Group Ltd. has a market capitalization of HK$5.1b, and reported total annual CEO compensation of CN¥1.7m for the year to December 2023. That's a notable decrease of 26% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥486k.

On examining similar-sized companies in the Hong Kong Trade Distributors industry with market capitalizations between HK$3.1b and HK$12b, we discovered that the median CEO total compensation of that group was CN¥3.4m. Accordingly, Zall Smart Commerce Group pays its CEO under the industry median. What's more, Zhi Yan holds HK$3.6b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	CN¥486k	CN¥1.1m	29%
Other	CN¥1.2m	CN¥1.1m	71%
Total Compensation	CN¥1.7m	CN¥2.2m	100%

On an industry level, around 94% of total compensation represents salary and 6% is other remuneration. Zall Smart Commerce Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Zall Smart Commerce Group Ltd.'s Growth

Zall Smart Commerce Group Ltd. has reduced its earnings per share by 7.9% a year over the last three years. Its revenue is up 13% over the last year.

Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. 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 Zall Smart Commerce Group Ltd. Been A Good Investment?

Since shareholders would have lost about 30% over three years, some Zall Smart Commerce Group Ltd. investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 4 warning signs (and 2 which don't sit too well with us) in Zall Smart Commerce Group we think you should know about.

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.