Shareholders Will Probably Not Have Any Issues With China Boqi Environmental (Holding) Co., Ltd.'s (HKG:2377) CEO Compensation

Key Insights

• China Boqi Environmental (Holding) to hold its Annual General Meeting on 31st of May
• Total pay for CEO Zhijun Zeng includes CN¥939.0k salary
• The overall pay is 43% below the industry average
• China Boqi Environmental (Holding)'s EPS grew by 4.5% over the past three years while total shareholder loss over the past three years was 57%

Shareholders may be wondering what CEO Zhijun Zeng plans to do to improve the less than great performance at China Boqi Environmental (Holding) Co., Ltd. (HKG:2377) recently. At the next AGM coming up on 31st of May, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for China Boqi Environmental (Holding)

Comparing China Boqi Environmental (Holding) Co., Ltd.'s CEO Compensation With The Industry

According to our data, China Boqi Environmental (Holding) Co., Ltd. has a market capitalization of HK$704m, and paid its CEO total annual compensation worth CN¥1.0m over the year to December 2023. That is, the compensation was roughly the same as last year. In particular, the salary of CN¥939.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Commercial Services industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.8m. Accordingly, China Boqi Environmental (Holding) pays its CEO under the industry median. Moreover, Zhijun Zeng also holds HK$179m worth of China Boqi Environmental (Holding) stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	CN¥939k	CN¥931k	94%
Other	CN¥63k	CN¥57k	6%
Total Compensation	CN¥1.0m	CN¥988k	100%

On an industry level, around 82% of total compensation represents salary and 18% is other remuneration. It's interesting to note that China Boqi Environmental (Holding) pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at China Boqi Environmental (Holding) Co., Ltd.'s Growth Numbers

Over the past three years, China Boqi Environmental (Holding) Co., Ltd. has seen its earnings per share (EPS) grow by 4.5% per year. Its revenue is up 13% over the last year.

We think the revenue growth is good. And the modest growth in EPS isn't bad, either. Although we'll stop short of calling the stock a top performer, we think the company has potential. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has China Boqi Environmental (Holding) Co., Ltd. Been A Good Investment?

With a total shareholder return of -57% over three years, China Boqi Environmental (Holding) Co., Ltd. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The loss to shareholders over the past three years is certainly concerning. The lacklustre earnings growth perhaps may have something to do with the downward trend in the share price. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for China Boqi Environmental (Holding) that you should be aware of before investing.

Switching gears from China Boqi Environmental (Holding), 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.