Why We Think China Aluminum Cans Holdings Limited's (HKG:6898) CEO Compensation Is Not Excessive At All

Key Insights

• China Aluminum Cans Holdings' Annual General Meeting to take place on 21st of May
• Salary of HK$344.0k is part of CEO Wan Tsang Lin's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, China Aluminum Cans Holdings' EPS fell by 1.5% and over the past three years, the total shareholder return was 28%

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Despite positive share price growth of 28% for China Aluminum Cans Holdings Limited (HKG:6898) 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 21st of May. 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. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for China Aluminum Cans Holdings

Comparing China Aluminum Cans Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that China Aluminum Cans Holdings Limited has a market capitalization of HK$488m, and reported total annual CEO compensation of HK$1.9m for the year to December 2024. We note that's an increase of 11% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$344k.

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$1.7m. From this we gather that Wan Tsang Lin is paid around the median for CEOs in the industry. What's more, Wan Tsang Lin holds HK$326m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	HK$344k	HK$346k	18%
Other	HK$1.6m	HK$1.4m	82%
Total Compensation	HK$1.9m	HK$1.7m	100%

Talking in terms of the industry, salary represented approximately 74% of total compensation out of all the companies we analyzed, while other remuneration made up 26% of the pie. It's interesting to note that China Aluminum Cans Holdings allocates a smaller portion of compensation to salary 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.

China Aluminum Cans Holdings Limited's Growth

Over the last three years, China Aluminum Cans Holdings Limited has shrunk its earnings per share by 1.5% per year. Its revenue is down 3.3% over the previous year.

Its a bit disappointing to see that the company has failed to grow its EPS. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has China Aluminum Cans Holdings Limited Been A Good Investment?

China Aluminum Cans Holdings Limited has served shareholders reasonably well, with a total return of 28% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for China Aluminum Cans Holdings that investors should think about before committing capital to this stock.

Switching gears from China Aluminum Cans Holdings, 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.