Here's Why We Think EVA Precision Industrial Holdings Limited's (HKG:838) CEO Compensation Looks Fair for the time being

Key Insights

• EVA Precision Industrial Holdings' Annual General Meeting to take place on 20th of May
• Salary of HK$5.76m is part of CEO Yaohua Zhang's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, EVA Precision Industrial Holdings' EPS grew by 42% and over the past three years, the total shareholder return was 21%

Under the guidance of CEO Yaohua Zhang, EVA Precision Industrial Holdings Limited (HKG:838) has performed reasonably well recently. As shareholders go into the upcoming AGM on 20th of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

See our latest analysis for EVA Precision Industrial Holdings

Comparing EVA Precision Industrial Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that EVA Precision Industrial Holdings Limited has a market capitalization of HK$1.4b, and reported total annual CEO compensation of HK$8.5m for the year to December 2023. Notably, that's a decrease of 11% over the year before. We note that the salary portion, which stands at HK$5.76m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Machinery industry with market capitalizations ranging from HK$781m to HK$3.1b, the reported median CEO total compensation was HK$8.5m. This suggests that EVA Precision Industrial Holdings remunerates its CEO largely in line with the industry average. What's more, Yaohua Zhang holds HK$37m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	HK$5.8m	HK$5.8m	68%
Other	HK$2.8m	HK$3.8m	32%
Total Compensation	HK$8.5m	HK$9.5m	100%

Talking in terms of the industry, salary represented approximately 76% of total compensation out of all the companies we analyzed, while other remuneration made up 24% of the pie. EVA Precision Industrial Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

EVA Precision Industrial Holdings Limited's Growth

EVA Precision Industrial Holdings Limited has seen its earnings per share (EPS) increase by 42% a year over the past three years. It saw its revenue drop 1.4% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 EVA Precision Industrial Holdings Limited Been A Good Investment?

EVA Precision Industrial Holdings Limited has generated a total shareholder return of 21% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for EVA Precision Industrial Holdings that investors should be aware of in a dynamic business environment.

Switching gears from EVA Precision Industrial 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.