Great Water Holdings Limited's (HKG:8196) CEO Will Probably Struggle To See A Pay Rise This Year

Performance at Great Water Holdings Limited (HKG:8196) has not been particularly rosy recently and shareholders will likely be holding CEO Yang Xie and the board accountable for this. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 10 May 2021. The data we gathered below shows that CEO compensation looks acceptable for now.

See our latest analysis for Great Water Holdings

Comparing Great Water Holdings Limited's CEO Compensation With the industry

According to our data, Great Water Holdings Limited has a market capitalization of HK$96m, and paid its CEO total annual compensation worth CN¥844k over the year to December 2020. That's a fairly small increase of 5.9% over the previous year. In particular, the salary of CN¥513.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥2.0m. Accordingly, Great Water Holdings pays its CEO under the industry median. Moreover, Yang Xie also holds HK$29m worth of Great Water Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	CN¥513k	CN¥506k	61%
Other	CN¥331k	CN¥291k	39%
Total Compensation	CN¥844k	CN¥797k	100%

Speaking on an industry level, nearly 94% of total compensation represents salary, while the remainder of 6% is other remuneration. Great Water Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Great Water Holdings Limited's Growth Numbers

Over the last three years, Great Water Holdings Limited has shrunk its earnings per share by 123% per year. Its revenue is down 38% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Great Water Holdings Limited Been A Good Investment?

Few Great Water Holdings Limited shareholders would feel satisfied with the return of -93% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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 3 warning signs for Great Water Holdings (1 doesn't sit too well with us!) that you should be aware of before investing here.

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. 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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