Increases to Shougang Fushan Resources Group Limited's (HKG:639) CEO Compensation Might Cool off for now
Key Insights
- Shougang Fushan Resources Group to hold its Annual General Meeting on 30th of June
- Total pay for CEO Wenli Fan includes HK$2.76m salary
- Total compensation is 93% above industry average
- Over the past three years, Shougang Fushan Resources Group's EPS fell by 16% and over the past three years, the total shareholder return was 26%
Despite positive share price growth of 26% for Shougang Fushan Resources Group Limited (HKG:639) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 30th of June. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.
Check out our latest analysis for Shougang Fushan Resources Group
Comparing Shougang Fushan Resources Group Limited's CEO Compensation With The Industry
Our data indicates that Shougang Fushan Resources Group Limited has a market capitalization of HK$13b, and total annual CEO compensation was reported as HK$2.8m for the year to December 2024. There was no change in the compensation compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$2.8m.
For comparison, other companies in the Hong Kong Metals and Mining industry with market capitalizations ranging between HK$7.8b and HK$25b had a median total CEO compensation of HK$1.4m. Accordingly, our analysis reveals that Shougang Fushan Resources Group Limited pays Wenli Fan north of the industry median.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | HK$2.8m | HK$2.8m | 100% |
| Other | - | - | - |
| Total Compensation | HK$2.8m | HK$2.8m | 100% |
Speaking on an industry level, nearly 83% of total compensation represents salary, while the remainder of 17% is other remuneration. On a company level, Shougang Fushan Resources Group prefers to reward its CEO through a salary, opting not to pay Wenli Fan through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Shougang Fushan Resources Group Limited's Growth Numbers
Shougang Fushan Resources Group Limited has reduced its earnings per share by 16% a year over the last three years. Its revenue is down 14% over the previous year.
Few shareholders would be pleased to read that EPS have declined. 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 Shougang Fushan Resources Group Limited Been A Good Investment?
Shougang Fushan Resources Group Limited has generated a total shareholder return of 26% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
Shougang Fushan Resources Group pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Shougang Fushan Resources Group (of which 1 makes us a bit uncomfortable!) 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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Discover if Shougang Fushan Resources Group might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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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.