We Think Some Shareholders May Hesitate To Increase Renrui Human Resources Technology Holdings Limited's (HKG:6919) CEO Compensation

Key Insights

• Renrui Human Resources Technology Holdings will host its Annual General Meeting on 12th of June
• Total pay for CEO Jianguo Zhang includes CN¥1.20m salary
• The total compensation is similar to the average for the industry
• Renrui Human Resources Technology Holdings' three-year loss to shareholders was 79% while its EPS was down 40% over the past three years

Shareholders of Renrui Human Resources Technology Holdings Limited (HKG:6919) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also poor, despite revenues growing. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 12th 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.

Check out our latest analysis for Renrui Human Resources Technology Holdings

Comparing Renrui Human Resources Technology Holdings Limited's CEO Compensation With The Industry

Our data indicates that Renrui Human Resources Technology Holdings Limited has a market capitalization of HK$710m, and total annual CEO compensation was reported as CN¥1.7m for the year to December 2023. That's a modest increase of 6.5% on the prior year. We note that the salary portion, which stands at CN¥1.20m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Professional Services industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.6m. From this we gather that Jianguo Zhang is paid around the median for CEOs in the industry. What's more, Jianguo Zhang holds HK$213m 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	CN¥1.2m	CN¥1.2m	70%
Other	CN¥520k	CN¥435k	30%
Total Compensation	CN¥1.7m	CN¥1.6m	100%

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. Renrui Human Resources Technology Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Renrui Human Resources Technology Holdings Limited's Growth

Over the last three years, Renrui Human Resources Technology Holdings Limited has shrunk its earnings per share by 40% per year. Its revenue is up 23% over the last year.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Renrui Human Resources Technology Holdings Limited Been A Good Investment?

The return of -79% over three years would not have pleased Renrui Human Resources Technology Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Renrui Human Resources Technology Holdings that investors should be aware of in a dynamic business environment.

Switching gears from Renrui Human Resources Technology 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.