CAA Resources Limited's (HKG:2112) CEO Might Not Expect Shareholders To Be So Generous This Year

CAA Resources Limited (HKG:2112) has not performed well recently and CEO Yang Li will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 31 August 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for CAA Resources

How Does Total Compensation For Yang Li Compare With Other Companies In The Industry?

According to our data, CAA Resources Limited has a market capitalization of HK$134m, and paid its CEO total annual compensation worth US$298k over the year to December 2020. That's a notable decrease of 20% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$111k.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of US$315k. From this we gather that Yang Li is paid around the median for CEOs in the industry. What's more, Yang Li holds HK$75m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$111k	US$106k	37%
Other	US$187k	US$267k	63%
Total Compensation	US$298k	US$373k	100%

On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. In CAA Resources' case, non-salary compensation represents a greater slice of total remuneration, 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.

CAA Resources Limited's Growth

CAA Resources Limited has reduced its earnings per share by 101% a year over the last three years. In the last year, its revenue is down 97%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has CAA Resources Limited Been A Good Investment?

With a total shareholder return of -94% over three years, CAA Resources Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business 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 CAA Resources you should be aware of, and 2 of them are significant.

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.
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