It Looks Like Shenzhou International Group Holdings Limited's (HKG:2313) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Shenzhou International Group Holdings to hold its Annual General Meeting on 28th of May
• Salary of CN¥4.38m is part of CEO Guanlin Huang's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Shenzhou International Group Holdings' EPS fell by 3.7% and over the past three years, the total loss to shareholders 58%

Shenzhou International Group Holdings Limited (HKG:2313) has not performed well recently and CEO Guanlin Huang will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 28th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Shenzhou International Group Holdings

How Does Total Compensation For Guanlin Huang Compare With Other Companies In The Industry?

At the time of writing, our data shows that Shenzhou International Group Holdings Limited has a market capitalization of HK$121b, and reported total annual CEO compensation of CN¥4.4m for the year to December 2023. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at CN¥4.38m constitutes the majority of total compensation received by the CEO.

On comparing similar companies in the Hong Kong Luxury industry with market capitalizations above HK$62b, we found that the median total CEO compensation was CN¥5.1m. So it looks like Shenzhou International Group Holdings compensates Guanlin Huang in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	CN¥4.4m	CN¥4.4m	99%
Other	CN¥31k	CN¥30k	1%
Total Compensation	CN¥4.4m	CN¥4.4m	100%

On an industry level, around 94% of total compensation represents salary and 6% is other remuneration. Shenzhou International Group Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Shenzhou International Group Holdings Limited's Growth

Over the last three years, Shenzhou International Group Holdings Limited has shrunk its earnings per share by 3.7% per year. It saw its revenue drop 10% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. 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 Shenzhou International Group Holdings Limited Been A Good Investment?

With a total shareholder return of -58% over three years, Shenzhou International Group Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shenzhou International Group Holdings pays its CEO a majority of compensation through a salary. 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.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Shenzhou International Group Holdings (free visualization of insider trades).

Important note: Shenzhou International Group Holdings 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.