We Think China Conch Venture Holdings Limited's (HKG:586) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• China Conch Venture Holdings will host its Annual General Meeting on 25th of June
• CEO Qinying Ji's total compensation includes salary of CN¥601.0k
• The total compensation is similar to the average for the industry
• Over the past three years, China Conch Venture Holdings' EPS fell by 30% and over the past three years, the total loss to shareholders 72%

China Conch Venture Holdings Limited (HKG:586) has not performed well recently and CEO Qinying Ji will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 25th of June. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for China Conch Venture Holdings

Comparing China Conch Venture Holdings Limited's CEO Compensation With The Industry

According to our data, China Conch Venture Holdings Limited has a market capitalization of HK$11b, and paid its CEO total annual compensation worth CN¥2.6m over the year to December 2023. We note that's a small decrease of 6.4% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥601k.

On comparing similar companies from the Hong Kong Construction industry with market caps ranging from HK$7.8b to HK$25b, we found that the median CEO total compensation was CN¥2.3m. This suggests that China Conch Venture Holdings remunerates its CEO largely in line with the industry average. Furthermore, Qinying Ji directly owns HK$215m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥601k	CN¥594k	23%
Other	CN¥2.0m	CN¥2.2m	77%
Total Compensation	CN¥2.6m	CN¥2.7m	100%

Talking in terms of the industry, salary represented approximately 83% of total compensation out of all the companies we analyzed, while other remuneration made up 17% of the pie. It's interesting to note that China Conch Venture 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.

China Conch Venture Holdings Limited's Growth

China Conch Venture Holdings Limited has reduced its earnings per share by 30% a year over the last three years. It achieved revenue growth of 1.5% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has China Conch Venture Holdings Limited Been A Good Investment?

The return of -72% over three years would not have pleased China Conch Venture Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for China Conch Venture Holdings (1 shouldn't be ignored!) that you should be aware of before investing here.

Important note: China Conch Venture Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com