It Looks Like Chongqing Iron & Steel Company Limited's (HKG:1053) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Chongqing Iron & Steel's Annual General Meeting to take place on 27th of June
• Salary of CN¥1.07m is part of CEO Wenwang Meng's total remuneration
• The total compensation is similar to the average for the industry
• Chongqing Iron & Steel's EPS declined by 66% over the past three years while total shareholder loss over the past three years was 22%

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The results at Chongqing Iron & Steel Company Limited (HKG:1053) have been quite disappointing recently and CEO Wenwang Meng bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 27th of June. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Chongqing Iron & Steel

How Does Total Compensation For Wenwang Meng Compare With Other Companies In The Industry?

According to our data, Chongqing Iron & Steel Company Limited has a market capitalization of HK$12b, and paid its CEO total annual compensation worth CN¥1.3m over the year to December 2024. We note that's a decrease of 16% compared to last year. In particular, the salary of CN¥1.07m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Metals and Mining industry with market capitalizations ranging from HK$7.8b to HK$25b, the reported median CEO total compensation was CN¥1.3m. So it looks like Chongqing Iron & Steel compensates Wenwang Meng in line with the median for the industry.

Talking in terms of the industry, salary represented approximately 83% of total compensation out of all the companies we analyzed, while other remuneration made up 17% of the pie. There isn't a significant difference between Chongqing Iron & Steel and the broader market, in terms of salary allocation in the overall compensation package. 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.

Chongqing Iron & Steel Company Limited's Growth

Over the last three years, Chongqing Iron & Steel Company Limited has shrunk its earnings per share by 66% per year. It saw its revenue drop 29% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Chongqing Iron & Steel Company Limited Been A Good Investment?

Since shareholders would have lost about 22% over three years, some Chongqing Iron & Steel Company Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Chongqing Iron & Steel (free visualization of insider trades).

Important note: Chongqing Iron & Steel is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.