We Discuss Why Xingfa Aluminium Holdings Limited's (HKG:98) CEO Compensation May Be Closely Reviewed

Key Insights

• Xingfa Aluminium Holdings' Annual General Meeting to take place on 29th of May
• Total pay for CEO Yuqing Liao includes CN¥270.0k salary
• Total compensation is 61% above industry average
• Xingfa Aluminium Holdings' EPS declined by 2.5% over the past three years while total shareholder loss over the past three years was 3.3%

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Shareholders will probably not be too impressed with the underwhelming results at Xingfa Aluminium Holdings Limited (HKG:98) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 29th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Xingfa Aluminium Holdings

Comparing Xingfa Aluminium Holdings Limited's CEO Compensation With The Industry

According to our data, Xingfa Aluminium Holdings Limited has a market capitalization of HK$3.3b, and paid its CEO total annual compensation worth CN¥3.4m over the year to December 2024. Notably, that's an increase of 22% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥270k.

In comparison with other companies in the Hong Kong Metals and Mining industry with market capitalizations ranging from HK$1.6b to HK$6.3b, the reported median CEO total compensation was CN¥2.1m. Hence, we can conclude that Yuqing Liao is remunerated higher than the industry median.

On an industry level, roughly 83% of total compensation represents salary and 17% is other remuneration. Xingfa Aluminium Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Xingfa Aluminium Holdings Limited's Growth Numbers

Xingfa Aluminium Holdings Limited has reduced its earnings per share by 2.5% a year over the last three years. It achieved revenue growth of 8.7% over the last year.

The lack of EPS growth is certainly uninspiring. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Xingfa Aluminium Holdings Limited Been A Good Investment?

Since shareholders would have lost about 3.3% over three years, some Xingfa Aluminium Holdings Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a 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 is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Xingfa Aluminium Holdings that investors should look into moving forward.

Important note: Xingfa Aluminium Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.