We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Beijing Enterprises Urban Resources Group Limited's (HKG:3718) CEO For Now

Key Insights

• Beijing Enterprises Urban Resources Group will host its Annual General Meeting on 3rd of June
• Salary of CN¥1.45m is part of CEO Kexi Zhao's total remuneration
• Total compensation is 212% above industry average
• Over the past three years, Beijing Enterprises Urban Resources Group's EPS fell by 60% and over the past three years, the total loss to shareholders 50%

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Shareholders of Beijing Enterprises Urban Resources Group Limited (HKG:3718) will have been dismayed by the negative share price return over the last three years. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 3rd of June, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

See our latest analysis for Beijing Enterprises Urban Resources Group

Comparing Beijing Enterprises Urban Resources Group Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Beijing Enterprises Urban Resources Group Limited has a market capitalization of HK$1.2b, and reported total annual CEO compensation of CN¥3.6m for the year to December 2024. Notably, that's an increase of 24% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥1.5m.

In comparison with other companies in the Hong Kong Commercial Services industry with market capitalizations ranging from HK$784m to HK$3.1b, the reported median CEO total compensation was CN¥1.1m. Accordingly, our analysis reveals that Beijing Enterprises Urban Resources Group Limited pays Kexi Zhao north of the industry median. What's more, Kexi Zhao holds HK$14m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 83% of total compensation represents salary and 17% is other remuneration. In Beijing Enterprises Urban Resources Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Beijing Enterprises Urban Resources Group Limited's Growth

Beijing Enterprises Urban Resources Group Limited has reduced its earnings per share by 60% a year over the last three years. It achieved revenue growth of 19% over the last year.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Beijing Enterprises Urban Resources Group Limited Been A Good Investment?

With a total shareholder return of -50% over three years, Beijing Enterprises Urban Resources Group Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for Beijing Enterprises Urban Resources Group you should be aware of, and 2 of them are potentially serious.

Important note: Beijing Enterprises Urban Resources Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.