We Discuss Whether CNNC International Limited's (HKG:2302) CEO Is Due For A Pay Rise

Key Insights

• CNNC International will host its Annual General Meeting on 17th of June
• CEO Yi Zhang's total compensation includes salary of HK$539.0k
• Total compensation is 45% below industry average
• CNNC International's EPS grew by 103% over the past three years while total shareholder return over the past three years was 73%

The impressive results at CNNC International Limited (HKG:2302) recently will be great news for shareholders. At the upcoming AGM on 17th of June, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

Check out our latest analysis for CNNC International

How Does Total Compensation For Yi Zhang Compare With Other Companies In The Industry?

Our data indicates that CNNC International Limited has a market capitalization of HK$1.3b, and total annual CEO compensation was reported as HK$1.1m for the year to December 2023. That's a notable decrease of 13% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$539k.

On examining similar-sized companies in the Hong Kong Trade Distributors industry with market capitalizations between HK$781m and HK$3.1b, we discovered that the median CEO total compensation of that group was HK$2.0m. That is to say, Yi Zhang is paid under the industry median.

Component	2023	2022	Proportion (2023)
Salary	HK$539k	HK$505k	48%
Other	HK$591k	HK$794k	52%
Total Compensation	HK$1.1m	HK$1.3m	100%

Speaking on an industry level, nearly 92% of total compensation represents salary, while the remainder of 8% is other remuneration. CNNC International pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

CNNC International Limited's Growth

CNNC International Limited's earnings per share (EPS) grew 103% per year over the last three years. In the last year, its revenue is down 36%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 CNNC International Limited Been A Good Investment?

Most shareholders would probably be pleased with CNNC International Limited for providing a total return of 73% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at CNNC International.

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.