Here's Why Shareholders Will Not Be Complaining About China New Higher Education Group Limited's (HKG:2001) CEO Pay Packet

We have been pretty impressed with the performance at China New Higher Education Group Limited (HKG:2001) recently and CEO Shuai Zhao deserves a mention for their role in it. Coming up to the next AGM on 24 February 2023, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

Check out our latest analysis for China New Higher Education Group

Comparing China New Higher Education Group Limited's CEO Compensation With The Industry

Our data indicates that China New Higher Education Group Limited has a market capitalization of HK$5.6b, and total annual CEO compensation was reported as CN¥1.5m for the year to August 2022. We note that's an increase of 8.8% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥687k.

On comparing similar companies from the Hong Kong Consumer Services industry with market caps ranging from HK$3.1b to HK$13b, we found that the median CEO total compensation was CN¥1.8m. From this we gather that Shuai Zhao is paid around the median for CEOs in the industry.

On an industry level, roughly 81% of total compensation represents salary and 19% is other remuneration. It's interesting to note that China New Higher Education Group allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

China New Higher Education Group Limited's Growth

China New Higher Education Group Limited has seen its earnings per share (EPS) increase by 20% a year over the past three years. It achieved revenue growth of 28% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 New Higher Education Group Limited Been A Good Investment?

Most shareholders would probably be pleased with China New Higher Education Group Limited for providing a total return of 44% over three years. 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.

In Summary...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at 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.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for China New Higher Education Group that investors should look into moving forward.

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.