We Think Shougang Fushan Resources Group Limited's (HKG:639) CEO Compensation Looks Fair

Key Insights

• Shougang Fushan Resources Group's Annual General Meeting to take place on 30th of May
• CEO Wenli Fan's total compensation includes salary of HK$2.76m
• The total compensation is similar to the average for the industry
• Over the past three years, Shougang Fushan Resources Group's EPS grew by 23% and over the past three years, the total shareholder return was 145%

The performance at Shougang Fushan Resources Group Limited (HKG:639) has been quite strong recently and CEO Wenli Fan has played a role in it. Coming up to the next AGM on 30th of May, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

Check out our latest analysis for Shougang Fushan Resources Group

Comparing Shougang Fushan Resources Group Limited's CEO Compensation With The Industry

According to our data, Shougang Fushan Resources Group Limited has a market capitalization of HK$17b, and paid its CEO total annual compensation worth HK$2.8m over the year to December 2023. There was no change in the compensation compared to last year. Notably, the salary of HK$2.8m is the entirety of the CEO compensation.

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 HK$2.1m. So it looks like Shougang Fushan Resources Group compensates Wenli Fan in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	HK$2.8m	HK$2.8m	100%
Other	-	-	-
Total Compensation	HK$2.8m	HK$2.8m	100%

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Speaking on a company level, Shougang Fushan Resources Group prefers to tread along a traditional path, disbursing all compensation through a salary. 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 Shougang Fushan Resources Group Limited's Growth Numbers

Shougang Fushan Resources Group Limited's earnings per share (EPS) grew 23% per year over the last three years. It saw its revenue drop 28% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Shougang Fushan Resources Group Limited Been A Good Investment?

Boasting a total shareholder return of 145% over three years, Shougang Fushan Resources Group Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Shougang Fushan Resources Group pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at 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.

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 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Shougang Fushan Resources Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.