Here's Why Fufeng Group Limited's (HKG:546) CEO May Deserve A Raise

Key Insights

• Fufeng Group to hold its Annual General Meeting on 30th of May
• Total pay for CEO Deheng Li includes CN¥2.08m salary
• The total compensation is 63% less than the average for the industry
• Over the past three years, Fufeng Group's EPS grew by 71% and over the past three years, the total shareholder return was 216%

The impressive results at Fufeng Group Limited (HKG:546) recently will be great news for shareholders. At the upcoming AGM on 30th of May, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

Check out our latest analysis for Fufeng Group

Comparing Fufeng Group Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Fufeng Group Limited has a market capitalization of HK$15b, and reported total annual CEO compensation of CN¥2.1m for the year to December 2023. That's a fairly small increase of 7.4% over the previous year. In particular, the salary of CN¥2.08m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the Hong Kong Chemicals industry with market caps ranging from HK$7.8b to HK$25b, we found that the median CEO total compensation was CN¥5.8m. In other words, Fufeng Group pays its CEO lower than the industry median. Furthermore, Deheng Li directly owns HK$214m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥2.1m	CN¥1.9m	97%
Other	CN¥64k	CN¥60k	3%
Total Compensation	CN¥2.1m	CN¥2.0m	100%

On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. Investors will find it interesting that Fufeng Group pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. 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 Fufeng Group Limited's Growth Numbers

Fufeng Group Limited's earnings per share (EPS) grew 71% per year over the last three years. Its revenue is up 1.9% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Fufeng Group Limited Been A Good Investment?

Boasting a total shareholder return of 216% over three years, Fufeng Group Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Deheng receives almost all of their compensation through a salary. The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for Fufeng Group (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.