We Take A Look At Why Shenwan Hongyuan (H.K.) Limited's (HKG:218) CEO Compensation Is Well Earned

Key Insights

• Shenwan Hongyuan (H.K.) to hold its Annual General Meeting on 23rd of May
• Total pay for CEO Jun Liang includes HK$3.84m salary
• The total compensation is similar to the average for the industry
• Shenwan Hongyuan (H.K.)'s EPS grew by 18% over the past three years while total shareholder return over the past three years was 79%

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We have been pretty impressed with the performance at Shenwan Hongyuan (H.K.) Limited (HKG:218) recently and CEO Jun Liang deserves a mention for their role in it. Coming up to the next AGM on 23rd of May, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

View our latest analysis for Shenwan Hongyuan (H.K.)

How Does Total Compensation For Jun Liang Compare With Other Companies In The Industry?

At the time of writing, our data shows that Shenwan Hongyuan (H.K.) Limited has a market capitalization of HK$2.0b, and reported total annual CEO compensation of HK$4.2m for the year to December 2024. That is, the compensation was roughly the same as last year. Notably, the salary which is HK$3.84m, represents most of the total compensation being paid.

On comparing similar companies from the Hong Kong Capital Markets industry with market caps ranging from HK$781m to HK$3.1b, we found that the median CEO total compensation was HK$4.0m. This suggests that Shenwan Hongyuan (H.K.) remunerates its CEO largely in line with the industry average.

Component	2024	2023	Proportion (2024)
Salary	HK$3.8m	HK$3.9m	91%
Other	HK$384k	HK$384k	9%
Total Compensation	HK$4.2m	HK$4.2m	100%

On an industry level, roughly 86% of total compensation represents salary and 14% is other remuneration. There isn't a significant difference between Shenwan Hongyuan (H.K.) and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Shenwan Hongyuan (H.K.) Limited's Growth Numbers

Shenwan Hongyuan (H.K.) Limited's earnings per share (EPS) grew 18% per year over the last three years. In the last year, its revenue is down 39%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Shenwan Hongyuan (H.K.) Limited Been A Good Investment?

Most shareholders would probably be pleased with Shenwan Hongyuan (H.K.) Limited for providing a total return of 79% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. In saying that, some shareholders may feel that the more important issues to be addressed may be how the management plans to steer the company towards sustainable profitability in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Shenwan Hongyuan (H.K.) that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.