Shareholders Will Probably Not Have Any Issues With China New Higher Education Group Limited's (HKG:2001) CEO Compensation

Shareholders may be wondering what CEO Shuai Zhao plans to do to improve the less than great performance at China New Higher Education Group Limited (HKG:2001) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 25 February 2022. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for China New Higher Education Group

Comparing China New Higher Education Group Limited's CEO Compensation With the industry

At the time of writing, our data shows that China New Higher Education Group Limited has a market capitalization of HK$4.3b, and reported total annual CEO compensation of CN¥1.4m for the year to August 2021. We note that's an increase of 26% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥562k.

On examining similar-sized companies in the industry with market capitalizations between HK$1.6b and HK$6.2b, we discovered that the median CEO total compensation of that group was CN¥3.6m. In other words, China New Higher Education Group pays its CEO lower than the industry median.

Component	2021	2020	Proportion (2021)
Salary	CN¥562k	CN¥333k	41%
Other	CN¥813k	CN¥758k	59%
Total Compensation	CN¥1.4m	CN¥1.1m	100%

Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 9% is other remuneration. China New Higher Education Group pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

China New Higher Education Group Limited's Growth

China New Higher Education Group Limited's earnings per share (EPS) grew 26% per year over the last three years. In the last year, its revenue is up 38%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has China New Higher Education Group Limited Been A Good Investment?

The return of -38% over three years would not have pleased China New Higher Education Group Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The loss to shareholders over the past three years is certainly concerning. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 3 warning signs for China New Higher Education Group that investors should be aware of in a dynamic business environment.

Switching gears from China New Higher Education Group, 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.