Stock Analysis

Shareholders May Not Be So Generous With ZhongAn Online P & C Insurance Co., Ltd.'s (HKG:6060) CEO Compensation And Here's Why

SEHK:6060
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Key Insights

  • ZhongAn Online P & C Insurance's Annual General Meeting to take place on 20th of June
  • Salary of CN¥1.53m is part of CEO Jiang Xing's total remuneration
  • The overall pay is comparable to the industry average
  • Over the past three years, ZhongAn Online P & C Insurance's EPS grew by 95% and over the past three years, the total loss to shareholders 68%

Shareholders of ZhongAn Online P & C Insurance Co., Ltd. (HKG:6060) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 20th of June. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for ZhongAn Online P & C Insurance

Comparing ZhongAn Online P & C Insurance Co., Ltd.'s CEO Compensation With The Industry

According to our data, ZhongAn Online P & C Insurance Co., Ltd. has a market capitalization of HK$20b, and paid its CEO total annual compensation worth CN¥3.7m over the year to December 2023. That's just a smallish increase of 3.6% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥1.5m.

On examining similar-sized companies in the Hong Kong Insurance industry with market capitalizations between HK$16b and HK$50b, we discovered that the median CEO total compensation of that group was CN¥2.9m. So it looks like ZhongAn Online P & C Insurance compensates Jiang Xing in line with the median for the industry.

Component20232022Proportion (2023)
Salary CN¥1.5m - 41%
Other CN¥2.2m CN¥3.6m 59%
Total CompensationCN¥3.7m CN¥3.6m100%

Talking in terms of the industry, salary represented approximately 53% of total compensation out of all the companies we analyzed, while other remuneration made up 47% of the pie. In ZhongAn Online P & C Insurance'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.

ceo-compensation
SEHK:6060 CEO Compensation June 13th 2024

ZhongAn Online P & C Insurance Co., Ltd.'s Growth

ZhongAn Online P & C Insurance Co., Ltd.'s earnings per share (EPS) grew 95% per year over the last three years. It achieved revenue growth of 30% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast 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 ZhongAn Online P & C Insurance Co., Ltd. Been A Good Investment?

The return of -68% over three years would not have pleased ZhongAn Online P & C Insurance Co., Ltd. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for ZhongAn Online P & C Insurance that you should be aware of before investing.

Switching gears from ZhongAn Online P & C Insurance, 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.

Valuation is complex, but we're helping make it simple.

Find out whether ZhongAn Online P & C Insurance is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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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.