We Think Shareholders May Want To Consider A Review Of Fosun International Limited's (HKG:656) CEO Compensation Package

Key Insights

• Fosun International's Annual General Meeting to take place on 5th of June
• CEO Qiyu Chen's total compensation includes salary of CN¥5.28m
• The overall pay is 1,010% above the industry average
• Fosun International's three-year loss to shareholders was 42% while its EPS was down 111% over the past three years

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Shareholders will probably not be too impressed with the underwhelming results at Fosun International Limited (HKG:656) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 5th of June. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Fosun International

Comparing Fosun International Limited's CEO Compensation With The Industry

According to our data, Fosun International Limited has a market capitalization of HK$35b, and paid its CEO total annual compensation worth CN¥36m over the year to December 2024. That's a notable decrease of 35% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥5.3m.

In comparison with other companies in the Hong Kong Industrials industry with market capitalizations ranging from HK$16b to HK$50b, the reported median CEO total compensation was CN¥3.2m. Hence, we can conclude that Qiyu Chen is remunerated higher than the industry median. Furthermore, Qiyu Chen directly owns HK$57m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 72% of total compensation represents salary and 28% is other remuneration. Fosun International pays a modest slice of remuneration through salary, as compared 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.

A Look at Fosun International Limited's Growth Numbers

Over the last three years, Fosun International Limited has shrunk its earnings per share by 111% per year. In the last year, its revenue is down 3.1%.

Overall this is not a very positive result for shareholders. 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. 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 Fosun International Limited Been A Good Investment?

Few Fosun International Limited shareholders would feel satisfied with the return of -42% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

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.

So you may want to check if insiders are buying Fosun International shares with their own money (free access).

Switching gears from Fosun International, 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.