This Is The Reason Why We Think Shanshan Brand Management Co., Ltd.'s (HKG:1749) CEO Might Be Underpaid
Key Insights
- Shanshan Brand Management to hold its Annual General Meeting on 9th of June
- Total pay for CEO Yefei Luo includes CN¥612.7k salary
- Total compensation is 66% below industry average
- Over the past three years, Shanshan Brand Management's EPS grew by 23% and over the past three years, the total shareholder return was 74%
The solid performance at Shanshan Brand Management Co., Ltd. (HKG:1749) has been impressive and shareholders will probably be pleased to know that CEO Yefei Luo has delivered. This would be kept in mind at the upcoming AGM on 9th of June which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.
See our latest analysis for Shanshan Brand Management
How Does Total Compensation For Yefei Luo Compare With Other Companies In The Industry?
Our data indicates that Shanshan Brand Management Co., Ltd. has a market capitalization of HK$144m, and total annual CEO compensation was reported as CN¥673k for the year to December 2024. That's a notable decrease of 9.3% on last year. We note that the salary portion, which stands at CN¥612.7k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the Hong Kong Luxury industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥2.0m. This suggests that Yefei Luo is paid below the industry median. Moreover, Yefei Luo also holds HK$16m worth of Shanshan Brand Management stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | CN¥613k | CN¥613k | 91% |
| Other | CN¥61k | CN¥130k | 9% |
| Total Compensation | CN¥673k | CN¥742k | 100% |
Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. There isn't a significant difference between Shanshan Brand Management and the broader market, in terms of salary allocation in the overall compensation package. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Shanshan Brand Management Co., Ltd.'s Growth Numbers
Shanshan Brand Management Co., Ltd. has seen its earnings per share (EPS) increase by 23% a year over the past three years. It saw its revenue drop 5.0% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Shanshan Brand Management Co., Ltd. Been A Good Investment?
We think that the total shareholder return of 74%, over three years, would leave most Shanshan Brand Management Co., Ltd. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Shanshan Brand Management that you should be aware of before investing.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.