Shareholders May Be More Conservative With China Demeter Financial Investments Limited's (HKG:8120) CEO Compensation For Now

Key Insights

• China Demeter Financial Investments' Annual General Meeting to take place on 19th of June
• Total pay for CEO Ting Ho Ng includes HK$2.68m salary
• The total compensation is 32% higher than the average for the industry
• China Demeter Financial Investments' three-year loss to shareholders was 55% while its EPS grew by 44% over the past three years

Shareholders of China Demeter Financial Investments Limited (HKG:8120) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 19th of June. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for China Demeter Financial Investments

How Does Total Compensation For Ting Ho Ng Compare With Other Companies In The Industry?

Our data indicates that China Demeter Financial Investments Limited has a market capitalization of HK$52m, and total annual CEO compensation was reported as HK$2.7m for the year to December 2023. We note that's a decrease of 22% compared to last year. We note that the salary portion, which stands at HK$2.68m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Hospitality industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.1m. Hence, we can conclude that Ting Ho Ng is remunerated higher than the industry median. Furthermore, Ting Ho Ng directly owns HK$14m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	HK$2.7m	HK$3.3m	99%
Other	HK$31k	HK$152k	1%
Total Compensation	HK$2.7m	HK$3.5m	100%

Speaking on an industry level, nearly 86% of total compensation represents salary, while the remainder of 14% is other remuneration. China Demeter Financial Investments is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

China Demeter Financial Investments Limited's Growth

China Demeter Financial Investments Limited has seen its earnings per share (EPS) increase by 44% a year over the past three years. In the last year, its revenue is up 11%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Demeter Financial Investments Limited Been A Good Investment?

Few China Demeter Financial Investments Limited shareholders would feel satisfied with the return of -55% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

China Demeter Financial Investments pays its CEO a majority of compensation through a salary. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 2 which can't be ignored) in China Demeter Financial Investments we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.