Here's Why Shareholders Should Examine Shentong Robot Education Group Company Limited's (HKG:8206) CEO Compensation Package More Closely

Shareholders will probably not be too impressed with the underwhelming results at Shentong Robot Education Group Company Limited (HKG:8206) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 30 July 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Shentong Robot Education Group

Comparing Shentong Robot Education Group Company Limited's CEO Compensation With the industry

At the time of writing, our data shows that Shentong Robot Education Group Company Limited has a market capitalization of HK$106m, and reported total annual CEO compensation of HK$1.3m for the year to March 2021. Notably, that's a decrease of 19% over the year before. We note that the salary portion, which stands at HK$868.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.3m. From this we gather that Yueqing Bao is paid around the median for CEOs in the industry.

Component	2021	2020	Proportion (2021)
Salary	HK$868k	HK$1.2m	68%
Other	HK$410k	HK$422k	32%
Total Compensation	HK$1.3m	HK$1.6m	100%

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. In Shentong Robot Education Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Shentong Robot Education Group Company Limited's Growth Numbers

Over the last three years, Shentong Robot Education Group Company Limited has shrunk its earnings per share by 96% per year. In the last year, its revenue is down 96%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Shentong Robot Education Group Company Limited Been A Good Investment?

With a total shareholder return of -85% over three years, Shentong Robot Education Group Company Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Shentong Robot Education Group (2 can't be ignored!) that you should be aware of before investing here.

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. 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.
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