Should Shareholders Worry About Yangzhou Guangling District Taihe Rural Micro-finance Company Limited's (HKG:1915) CEO Compensation Package?

Key Insights

• Yangzhou Guangling District Taihe Rural Micro-finance will host its Annual General Meeting on 7th of June
• CEO Li Bai's total compensation includes salary of CN¥300.0k
• The overall pay is 47% below the industry average
• Over the past three years, Yangzhou Guangling District Taihe Rural Micro-finance's EPS fell by 110% and over the past three years, the total loss to shareholders 59%

Performance at Yangzhou Guangling District Taihe Rural Micro-finance Company Limited (HKG:1915) has not been particularly rosy recently and shareholders will likely be holding CEO Li Bai and the board accountable for this. At the upcoming AGM on 7th of June, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. The data we gathered below shows that CEO compensation looks acceptable for now.

View our latest analysis for Yangzhou Guangling District Taihe Rural Micro-finance

How Does Total Compensation For Li Bai Compare With Other Companies In The Industry?

Our data indicates that Yangzhou Guangling District Taihe Rural Micro-finance Company Limited has a market capitalization of HK$342m, and total annual CEO compensation was reported as CN¥400k for the year to December 2023. This means that the compensation hasn't changed much from last year. Notably, the salary which is CN¥300.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the Hong Kong Consumer Finance industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥748k. This suggests that Li Bai is paid below the industry median. What's more, Li Bai holds HK$5.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	CN¥300k	CN¥300k	75%
Other	CN¥100k	CN¥95k	25%
Total Compensation	CN¥400k	CN¥395k	100%

Talking in terms of the industry, salary represented approximately 78% of total compensation out of all the companies we analyzed, while other remuneration made up 22% of the pie. Yangzhou Guangling District Taihe Rural Micro-finance is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Yangzhou Guangling District Taihe Rural Micro-finance Company Limited's Growth

Yangzhou Guangling District Taihe Rural Micro-finance Company Limited has reduced its earnings per share by 110% a year over the last three years. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is not a very positive result for shareholders. 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. 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 Yangzhou Guangling District Taihe Rural Micro-finance Company Limited Been A Good Investment?

The return of -59% over three years would not have pleased Yangzhou Guangling District Taihe Rural Micro-finance Company Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

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, 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. In our study, we found 3 warning signs for Yangzhou Guangling District Taihe Rural Micro-finance you should be aware of, and 1 of them shouldn't be ignored.

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.