Should Shareholders Worry About China Xinhua Education Group Limited's (HKG:2779) CEO Compensation Package?

Key Insights

• China Xinhua Education Group to hold its Annual General Meeting on 26th of June
• Salary of CN¥363.0k is part of CEO Yongkai Wang's total remuneration
• Total compensation is 54% below industry average
• China Xinhua Education Group's EPS declined by 2.3% over the past three years while total shareholder loss over the past three years was 46%

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The disappointing performance at China Xinhua Education Group Limited (HKG:2779) will make some shareholders rather disheartened. The next AGM coming up on 26th of June will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. From our analysis below, we think CEO compensation looks appropriate for now.

Check out our latest analysis for China Xinhua Education Group

How Does Total Compensation For Yongkai Wang Compare With Other Companies In The Industry?

Our data indicates that China Xinhua Education Group Limited has a market capitalization of HK$965m, and total annual CEO compensation was reported as CN¥974k for the year to December 2024. Notably, that's a decrease of 9.1% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥363k.

On comparing similar-sized companies in the Hong Kong Consumer Services industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥2.1m. That is to say, Yongkai Wang is paid under the industry median. Furthermore, Yongkai Wang directly owns HK$3.6m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 83% of total compensation out of all the companies we analyzed, while other remuneration made up 17% of the pie. China Xinhua Education Group pays a modest slice of remuneration through salary, as compared 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 Xinhua Education Group Limited's Growth

China Xinhua Education Group Limited has reduced its earnings per share by 2.3% a year over the last three years. Revenue was pretty flat on last year.

The lack of EPS growth is certainly uninspiring. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has China Xinhua Education Group Limited Been A Good Investment?

Few China Xinhua Education Group Limited shareholders would feel satisfied with the return of -46% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

Whatever your view on compensation, you might want to check if insiders are buying or selling China Xinhua Education Group shares (free trial).

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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.