In the past three years, the share price of Lingbao Gold Group Company Ltd. (HKG:3330) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 28 May 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
How Does Total Compensation For Jianzheng Chen Compare With Other Companies In The Industry?
According to our data, Lingbao Gold Group Company Ltd. has a market capitalization of HK$1.1b, and paid its CEO total annual compensation worth CN¥786k over the year to December 2020. We note that's a decrease of 12% compared to last year. We note that the salary portion, which stands at CN¥764.0k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥786k. From this we gather that Jianzheng Chen is paid around the median for CEOs in the industry.
On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. Lingbao Gold Group pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Lingbao Gold Group Company Ltd.'s Growth
Lingbao Gold Group Company Ltd.'s earnings per share (EPS) grew 37% per year over the last three years. Its revenue is down 4.7% over the previous year.
This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Lingbao Gold Group Company Ltd. Been A Good Investment?
Given the total shareholder loss of 22% over three years, many shareholders in Lingbao Gold Group Company Ltd. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.
Jianzheng receives almost all of their compensation through a salary. 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. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. 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.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for Lingbao Gold Group you should be aware of, and 1 of them can't be ignored.
Important note: Lingbao Gold Group 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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