Most Shareholders Will Probably Agree With Tsingtao Brewery Company Limited's (HKG:168) CEO Compensation

Key Insights

• Tsingtao Brewery's Annual General Meeting to take place on 28th of June
• Total pay for CEO Zong Xiang Jiang includes CN¥632.4k salary
• Total compensation is 48% below industry average
• Over the past three years, Tsingtao Brewery's EPS grew by 18% and over the past three years, the total loss to shareholders 36%

Performance at Tsingtao Brewery Company Limited (HKG:168) has been rather uninspiring recently and shareholders may be wondering how CEO Zong Xiang Jiang plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 28th of June. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for Tsingtao Brewery

How Does Total Compensation For Zong Xiang Jiang Compare With Other Companies In The Industry?

Our data indicates that Tsingtao Brewery Company Limited has a market capitalization of HK$90b, and total annual CEO compensation was reported as CN¥1.6m for the year to December 2023. That's a notable increase of 79% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥632k.

In comparison with other companies in the Hong Kong Beverage industry with market capitalizations over HK$62b, the reported median total CEO compensation was CN¥3.0m. Accordingly, Tsingtao Brewery pays its CEO under the industry median. What's more, Zong Xiang Jiang holds HK$5.3m 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¥632k	CN¥514k	40%
Other	CN¥948k	CN¥369k	60%
Total Compensation	CN¥1.6m	CN¥882k	100%

On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. In Tsingtao Brewery's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Tsingtao Brewery Company Limited's Growth Numbers

Over the past three years, Tsingtao Brewery Company Limited has seen its earnings per share (EPS) grow by 18% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Tsingtao Brewery Company Limited Been A Good Investment?

The return of -36% over three years would not have pleased Tsingtao Brewery Company Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders have earned a negative share price return is certainly disconcerting. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Tsingtao Brewery (1 is a bit unpleasant!) that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com