Increases to Cheerwin Group Limited's (HKG:6601) CEO Compensation Might Cool off for now

Key Insights

• Cheerwin Group to hold its Annual General Meeting on 19th of June
• Total pay for CEO Danxia Chen includes CN¥6.88m salary
• The total compensation is 733% higher than the average for the industry
• Cheerwin Group's EPS grew by 28% over the past three years while total shareholder return over the past three years was 47%

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Performance at Cheerwin Group Limited (HKG:6601) has been reasonably good and CEO Danxia Chen has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 19th of June, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Cheerwin Group

Comparing Cheerwin Group Limited's CEO Compensation With The Industry

According to our data, Cheerwin Group Limited has a market capitalization of HK$3.9b, and paid its CEO total annual compensation worth CN¥9.3m over the year to December 2024. Notably, that's a decrease of 14% over the year before. We note that the salary portion, which stands at CN¥6.88m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the Hong Kong Household Products industry with market capitalizations between HK$1.6b and HK$6.3b, we discovered that the median CEO total compensation of that group was CN¥1.1m. Hence, we can conclude that Danxia Chen is remunerated higher than the industry median. Moreover, Danxia Chen also holds HK$14m worth of Cheerwin Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 92% of total compensation out of all the companies we analyzed, while other remuneration made up 8% of the pie. Cheerwin Group pays a modest slice of remuneration through salary, as compared to the broader 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 Cheerwin Group Limited's Growth Numbers

Over the past three years, Cheerwin Group Limited has seen its earnings per share (EPS) grow by 28% per year. In the last year, its revenue is up 13%.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Cheerwin Group Limited Been A Good Investment?

We think that the total shareholder return of 47%, over three years, would leave most Cheerwin Group Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Cheerwin Group (1 is a bit unpleasant!) that you should be aware of before investing here.

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.