Shareholders May Be Wary Of Increasing Xinyi Glass Holdings Limited's (HKG:868) CEO Compensation Package

Key Insights

• Xinyi Glass Holdings' Annual General Meeting to take place on 31st of May
• Salary of HK$8.05m is part of CEO Ching Sai Tung's total remuneration
• The overall pay is 387% above the industry average
• Xinyi Glass Holdings' three-year loss to shareholders was 64% while its EPS was down 7.3% over the past three years

Xinyi Glass Holdings Limited (HKG:868) has not performed well recently and CEO Ching Sai Tung will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 31st of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Xinyi Glass Holdings

Comparing Xinyi Glass Holdings Limited's CEO Compensation With The Industry

According to our data, Xinyi Glass Holdings Limited has a market capitalization of HK$40b, and paid its CEO total annual compensation worth HK$38m over the year to December 2023. That's just a smallish increase of 4.7% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$8.1m.

On examining similar-sized companies in the Hong Kong Building industry with market capitalizations between HK$31b and HK$94b, we discovered that the median CEO total compensation of that group was HK$7.8m. Hence, we can conclude that Ching Sai Tung is remunerated higher than the industry median. Furthermore, Ching Sai Tung directly owns HK$4.8b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	HK$8.1m	HK$7.8m	21%
Other	HK$30m	HK$28m	79%
Total Compensation	HK$38m	HK$36m	100%

On an industry level, roughly 73% of total compensation represents salary and 27% is other remuneration. Xinyi Glass Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Xinyi Glass Holdings Limited's Growth

Xinyi Glass Holdings Limited has reduced its earnings per share by 7.3% a year over the last three years. Its revenue is up 4.1% over the last year.

Few shareholders would be pleased to read that EPS have declined. 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 Xinyi Glass Holdings Limited Been A Good Investment?

Few Xinyi Glass Holdings Limited shareholders would feel satisfied with the return of -64% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Xinyi Glass Holdings that investors should look into moving forward.

Switching gears from Xinyi Glass 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.