Should Shareholders Have Second Thoughts About A Pay Rise For Tiangong International Company Limited's (HKG:826) CEO This Year?

Key Insights

• Tiangong International to hold its Annual General Meeting on 19th of June
• CEO Zefeng Zhu's total compensation includes salary of CN¥416.0k
• Total compensation is 77% below industry average
• Tiangong International's three-year loss to shareholders was 27% while its EPS was down 19% over the past three years

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

The disappointing performance at Tiangong International Company Limited (HKG:826) will make some shareholders rather disheartened. The next AGM coming up on 19th of June will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. The data we gathered below shows that CEO compensation looks acceptable for now.

See our latest analysis for Tiangong International

Comparing Tiangong International Company Limited's CEO Compensation With The Industry

According to our data, Tiangong International Company Limited has a market capitalization of HK$5.6b, and paid its CEO total annual compensation worth CN¥416k over the year to December 2024. That's a notable increase of 73% on last year. Notably, the salary of CN¥416k is the entirety of the CEO compensation.

On examining similar-sized companies in the Hong Kong Metals and Mining industry with market capitalizations between HK$3.1b and HK$13b, we discovered that the median CEO total compensation of that group was CN¥1.8m. That is to say, Zefeng Zhu is paid under the industry median. Moreover, Zefeng Zhu also holds HK$1.4b worth of Tiangong International stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 83% of total compensation represents salary and 17% is other remuneration. At the company level, Tiangong International pays Zefeng Zhu solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Tiangong International Company Limited's Growth

Over the last three years, Tiangong International Company Limited has shrunk its earnings per share by 19% per year. It saw its revenue drop 6.4% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Tiangong International Company Limited Been A Good Investment?

Since shareholders would have lost about 27% over three years, some Tiangong International Company Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Tiangong International rewards its CEO solely through a salary, ignoring non-salary benefits completely. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Tiangong International that investors should be aware of in a dynamic business environment.

Switching gears from Tiangong International, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.