Shareholders Will Probably Hold Off On Increasing China Maple Leaf Educational Systems Limited's (HKG:1317) CEO Compensation For The Time Being

In the past three years, the share price of China Maple Leaf Educational Systems Limited (HKG:1317) has struggled to grow and now shareholders are sitting on a loss. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. The AGM coming up on 08 February 2022 will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

View our latest analysis for China Maple Leaf Educational Systems

Comparing China Maple Leaf Educational Systems Limited's CEO Compensation With the industry

Our data indicates that China Maple Leaf Educational Systems Limited has a market capitalization of HK$1.5b, and total annual CEO compensation was reported as CN¥3.4m for the year to August 2021. That's a notable decrease of 16% on last year. Notably, the salary of CN¥3.4m is the entirety of the CEO compensation.

For comparison, other companies in the same industry with market capitalizations ranging between HK$780m and HK$3.1b had a median total CEO compensation of CN¥1.7m. Hence, we can conclude that Sherman Jen is remunerated higher than the industry median. Moreover, Sherman Jen also holds HK$738m worth of China Maple Leaf Educational Systems stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	CN¥3.4m	CN¥3.6m	100%
Other	-	CN¥455k	-
Total Compensation	CN¥3.4m	CN¥4.1m	100%

On an industry level, around 90% of total compensation represents salary and 10% is other remuneration. At the company level, China Maple Leaf Educational Systems pays Sherman Jen solely through a salary, preferring to go down a conventional route. 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 China Maple Leaf Educational Systems Limited's Growth Numbers

China Maple Leaf Educational Systems Limited has reduced its earnings per share by 62% a year over the last three years. Its revenue is up 144% over the last year.

Investors would be a bit wary of companies that have lower EPS 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has China Maple Leaf Educational Systems Limited Been A Good Investment?

With a total shareholder return of -87% over three years, China Maple Leaf Educational Systems Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

China Maple Leaf Educational Systems rewards its CEO solely through a salary, ignoring non-salary benefits completely. The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for China Maple Leaf Educational Systems you should be aware of, and 1 of them makes us a bit uncomfortable.

Switching gears from China Maple Leaf Educational Systems, 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.