It's Unlikely That Shareholders Will Increase Huaxi Holdings Company Limited's (HKG:1689) Compensation By Much This Year

Key Insights

• Huaxi Holdings will host its Annual General Meeting on 25th of June
• Total pay for CEO Andy Zheng includes HK$122.0k salary
• The total compensation is 64% less than the average for the industry
• Over the past three years, Huaxi Holdings' EPS fell by 69% and over the past three years, the total loss to shareholders 50%

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Performance at Huaxi Holdings Company Limited (HKG:1689) has not been particularly rosy recently and shareholders will likely be holding CEO Andy Zheng and the board accountable for this. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 25th of June. From our analysis below, we think CEO compensation looks appropriate for now.

View our latest analysis for Huaxi Holdings

How Does Total Compensation For Andy Zheng Compare With Other Companies In The Industry?

At the time of writing, our data shows that Huaxi Holdings Company Limited has a market capitalization of HK$470m, and reported total annual CEO compensation of HK$634k for the year to December 2024. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$122k.

On comparing similar-sized companies in the Hong Kong Packaging industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.8m. That is to say, Andy Zheng is paid under the industry median. Moreover, Andy Zheng also holds HK$302m worth of Huaxi Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	HK$122k	HK$116k	19%
Other	HK$512k	HK$511k	81%
Total Compensation	HK$634k	HK$627k	100%

Speaking on an industry level, nearly 74% of total compensation represents salary, while the remainder of 26% is other remuneration. In Huaxi Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Huaxi Holdings Company Limited's Growth

Over the last three years, Huaxi Holdings Company Limited has shrunk its earnings per share by 69% per year. In the last year, its revenue is down 7.5%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Huaxi Holdings Company Limited Been A Good Investment?

The return of -50% over three years would not have pleased Huaxi Holdings Company Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which shouldn't be ignored) in Huaxi Holdings we think you should know about.

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.