Here's Why China Oral Industry Group Holdings Limited's (HKG:8406) CEO Compensation Is The Least Of Shareholders Concerns

Key Insights

• China Oral Industry Group Holdings' Annual General Meeting to take place on 6th of June
• Total pay for CEO Yao Guang Liu includes CN¥185.0k salary
• Total compensation is 75% below industry average
• China Oral Industry Group Holdings' three-year loss to shareholders was 84% while its EPS was down 1.5% over the past three years

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Performance at China Oral Industry Group Holdings Limited (HKG:8406) has been rather uninspiring recently and shareholders may be wondering how CEO Yao Guang Liu plans to fix this. At the next AGM coming up on 6th of June, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for China Oral Industry Group Holdings

How Does Total Compensation For Yao Guang Liu Compare With Other Companies In The Industry?

Our data indicates that China Oral Industry Group Holdings Limited has a market capitalization of HK$122m, and total annual CEO compensation was reported as CN¥365k for the year to December 2024. Notably, that's a decrease of 35% over the year before. In particular, the salary of CN¥185.0k, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Leisure industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.5m. In other words, China Oral Industry Group Holdings pays its CEO lower than the industry median.

On an industry level, roughly 92% of total compensation represents salary and 8% is other remuneration. It's interesting to note that China Oral Industry Group Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. 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.

China Oral Industry Group Holdings Limited's Growth

China Oral Industry Group Holdings Limited has reduced its earnings per share by 1.5% a year over the last three years. It achieved revenue growth of 38% over the last year.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has China Oral Industry Group Holdings Limited Been A Good Investment?

With a total shareholder return of -84% over three years, China Oral Industry Group Holdings Limited 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 poor performance of the share price might have something to do with the lack of earnings growth. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

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. That's why we did our research, and identified 4 warning signs for China Oral Industry Group Holdings (of which 2 are significant!) that you should know about in order to have a holistic understanding of the stock.

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.