We Think Shareholders May Want To Consider A Review Of Xinyi Electric Storage Holdings Limited's (HKG:8328) CEO Compensation Package

Key Insights

• Xinyi Electric Storage Holdings' Annual General Meeting to take place on 30th of May
• Salary of HK$1.95m is part of CEO Mohan Wang's total remuneration
• The overall pay is 245% above the industry average
• Over the past three years, Xinyi Electric Storage Holdings' EPS fell by 65% and over the past three years, the total loss to shareholders 82%

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The results at Xinyi Electric Storage Holdings Limited (HKG:8328) have been quite disappointing recently and CEO Mohan Wang bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 30th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Xinyi Electric Storage Holdings

Comparing Xinyi Electric Storage Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Xinyi Electric Storage Holdings Limited has a market capitalization of HK$558m, and reported total annual CEO compensation of HK$5.3m for the year to December 2024. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$1.9m.

On comparing similar-sized companies in the Hong Kong Electrical industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.5m. Hence, we can conclude that Mohan Wang is remunerated higher than the industry median.

Component	2024	2023	Proportion (2024)
Salary	HK$1.9m	HK$2.3m	37%
Other	HK$3.3m	HK$3.2m	63%
Total Compensation	HK$5.3m	HK$5.4m	100%

On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. It's interesting to note that Xinyi Electric Storage Holdings allocates a smaller portion of compensation to salary in comparison 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.

Xinyi Electric Storage Holdings Limited's Growth

Xinyi Electric Storage Holdings Limited has reduced its earnings per share by 65% a year over the last three years. It saw its revenue drop 11% over the last 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 Xinyi Electric Storage Holdings Limited Been A Good Investment?

The return of -82% over three years would not have pleased Xinyi Electric Storage Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which is potentially serious) in Xinyi Electric Storage Holdings we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.