Here's Why Shareholders May Want To Be Cautious With Increasing China Ludao Technology Company Limited's (HKG:2023) CEO Pay Packet

Key Insights

• China Ludao Technology will host its Annual General Meeting on 27th of May
• CEO Yuerong Yu's total compensation includes salary of CN¥1.09m
• Total compensation is similar to the industry average
• China Ludao Technology's three-year loss to shareholders was 22% while its EPS grew by 13% over the past three years

Our free stock report includes 2 warning signs investors should be aware of before investing in China Ludao Technology. Read for free now.

In the past three years, the share price of China Ludao Technology Company Limited (HKG:2023) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 27th of May. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for China Ludao Technology

Comparing China Ludao Technology Company Limited's CEO Compensation With The Industry

According to our data, China Ludao Technology Company Limited has a market capitalization of HK$418m, and paid its CEO total annual compensation worth CN¥1.1m over the year to December 2024. This means that the compensation hasn't changed much from last year. Notably, the salary which is CN¥1.09m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Household Products industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.2m. So it looks like China Ludao Technology compensates Yuerong Yu in line with the median for the industry. What's more, Yuerong Yu holds HK$213m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	CN¥1.1m	CN¥1.1m	99%
Other	CN¥16k	CN¥16k	1%
Total Compensation	CN¥1.1m	CN¥1.1m	100%

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. China Ludao Technology has gone down a largely traditional route, paying Yuerong Yu a high salary, giving it preference over non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

China Ludao Technology Company Limited's Growth

China Ludao Technology Company Limited has seen its earnings per share (EPS) increase by 13% a year over the past three years. In the last year, its revenue is up 28%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has China Ludao Technology Company Limited Been A Good Investment?

Since shareholders would have lost about 22% over three years, some China Ludao Technology Company Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Yuerong receives almost all of their compensation through a salary. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for China Ludao Technology that investors should look into moving forward.

Switching gears from China Ludao Technology, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.