Here's Why Shareholders May Want To Be Cautious With Increasing Zhongguancun Science-Tech Leasing Co., Ltd.'s (HKG:1601) CEO Pay Packet

Key Insights

• Zhongguancun Science-Tech Leasing will host its Annual General Meeting on 27th of June
• CEO Rongfeng He's total compensation includes salary of CN¥1.15m
• The total compensation is 81% higher than the average for the industry
• Zhongguancun Science-Tech Leasing's total shareholder return over the past three years was 44% while its EPS grew by 12% over the past three years

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CEO Rongfeng He has done a decent job of delivering relatively good performance at Zhongguancun Science-Tech Leasing Co., Ltd. (HKG:1601) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 27th of June. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Zhongguancun Science-Tech Leasing

How Does Total Compensation For Rongfeng He Compare With Other Companies In The Industry?

At the time of writing, our data shows that Zhongguancun Science-Tech Leasing Co., Ltd. has a market capitalization of HK$1.1b, and reported total annual CEO compensation of CN¥2.1m for the year to December 2024. Notably, that's a decrease of 26% over the year before. In particular, the salary of CN¥1.15m, makes up a fairly large portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Diversified Financial industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.2m. This suggests that Rongfeng He is paid more than the median for the industry.

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. Zhongguancun Science-Tech Leasing sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Zhongguancun Science-Tech Leasing Co., Ltd.'s Growth Numbers

Zhongguancun Science-Tech Leasing Co., Ltd.'s earnings per share (EPS) grew 12% per year over the last three years. It achieved revenue growth of 4.1% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Zhongguancun Science-Tech Leasing Co., Ltd. Been A Good Investment?

We think that the total shareholder return of 44%, over three years, would leave most Zhongguancun Science-Tech Leasing Co., Ltd. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for Zhongguancun Science-Tech Leasing you should be aware of, and 1 of them shouldn't be ignored.

Important note: Zhongguancun Science-Tech Leasing is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.