The Compensation For CIMC Enric Holdings Limited's (HKG:3899) CEO Looks Deserved And Here's Why

Key Insights

• CIMC Enric Holdings' Annual General Meeting to take place on 20th of May
• Salary of CN¥1.33m is part of CEO Xiaohu Yang's total remuneration
• The total compensation is similar to the average for the industry
• CIMC Enric Holdings' total shareholder return over the past three years was 38% while its EPS grew by 23% over the past three years

We have been pretty impressed with the performance at CIMC Enric Holdings Limited (HKG:3899) recently and CEO Xiaohu Yang deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 20th of May. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

See our latest analysis for CIMC Enric Holdings

Comparing CIMC Enric Holdings Limited's CEO Compensation With The Industry

Our data indicates that CIMC Enric Holdings Limited has a market capitalization of HK$17b, and total annual CEO compensation was reported as CN¥5.6m for the year to December 2023. Notably, that's an increase of 69% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥1.3m.

For comparison, other companies in the Hong Kong Machinery industry with market capitalizations ranging between HK$7.8b and HK$25b had a median total CEO compensation of CN¥5.6m. This suggests that CIMC Enric Holdings remunerates its CEO largely in line with the industry average. Moreover, Xiaohu Yang also holds HK$16m worth of CIMC Enric Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.3m	CN¥1.2m	24%
Other	CN¥4.2m	CN¥2.1m	76%
Total Compensation	CN¥5.6m	CN¥3.3m	100%

On an industry level, roughly 76% of total compensation represents salary and 24% is other remuneration. It's interesting to note that CIMC Enric Holdings allocates a smaller portion of compensation to salary 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.

A Look at CIMC Enric Holdings Limited's Growth Numbers

Over the past three years, CIMC Enric Holdings Limited has seen its earnings per share (EPS) grow by 23% per year. Its revenue is up 21% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has CIMC Enric Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with CIMC Enric Holdings Limited for providing a total return of 38% 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...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in 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.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for CIMC Enric Holdings that investors should be aware of in a dynamic business environment.

Switching gears from CIMC Enric Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.