We Think The Compensation For Yunhong Guixin Group Holdings Limited's (HKG:8349) CEO Looks About Right

Key Insights

• Yunhong Guixin Group Holdings to hold its Annual General Meeting on 25th of June
• Total pay for CEO Yaping Zhang includes CN¥564.0k salary
• Total compensation is 41% below industry average
• Yunhong Guixin Group Holdings' EPS declined by 67% over the past three years while total shareholder return over the past three years was 20%

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Shareholders may be wondering what CEO Yaping Zhang plans to do to improve the less than great performance at Yunhong Guixin Group Holdings Limited (HKG:8349) recently. At the next AGM coming up on 25th of June, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for Yunhong Guixin Group Holdings

Comparing Yunhong Guixin Group Holdings Limited's CEO Compensation With The Industry

Our data indicates that Yunhong Guixin Group Holdings Limited has a market capitalization of HK$952m, and total annual CEO compensation was reported as CN¥581k for the year to December 2024. That's just a smallish increase of 4.1% on last year. Notably, the salary which is CN¥564.0k, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Chemicals industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥981k. That is to say, Yaping Zhang is paid under the industry median.

Talking in terms of the industry, salary represented approximately 88% of total compensation out of all the companies we analyzed, while other remuneration made up 12% of the pie. Yunhong Guixin Group Holdings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Yunhong Guixin Group Holdings Limited's Growth

Over the last three years, Yunhong Guixin Group Holdings Limited has shrunk its earnings per share by 67% per year. In the last year, its revenue is down 43%.

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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Yunhong Guixin Group Holdings Limited Been A Good Investment?

Yunhong Guixin Group Holdings Limited has served shareholders reasonably well, with a total return of 20% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Yaping receives almost all of their compensation through a salary. Shareholder returns while positive, need to be looked at along with earnings, which have failed to grow and this could mean that the current momentum may not continue. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which is a bit unpleasant) in Yunhong Guixin Group Holdings we think you should know about.

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.