Here's Why Duiba Group Limited's (HKG:1753) CEO Compensation Is The Least Of Shareholders Concerns

Key Insights

• Duiba Group will host its Annual General Meeting on 31st of May
• Salary of CN¥494.0k is part of CEO Xiaoliang Chen's total remuneration
• The total compensation is 68% less than the average for the industry
• Duiba Group's three-year loss to shareholders was 84% while its EPS grew by 28% over the past three years

The performance at Duiba Group Limited (HKG:1753) has been rather lacklustre of late and shareholders may be wondering what CEO Xiaoliang Chen is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 31st of May. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for Duiba Group

How Does Total Compensation For Xiaoliang Chen Compare With Other Companies In The Industry?

Our data indicates that Duiba Group Limited has a market capitalization of HK$339m, and total annual CEO compensation was reported as CN¥954k for the year to December 2023. That's a notable increase of 45% on last year. In particular, the salary of CN¥494.0k, makes up a fairly large portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Interactive Media and Services industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥3.0m. That is to say, Xiaoliang Chen is paid under the industry median. Furthermore, Xiaoliang Chen directly owns HK$146m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥494k	CN¥356k	52%
Other	CN¥460k	CN¥303k	48%
Total Compensation	CN¥954k	CN¥659k	100%

Talking in terms of the industry, salary represented approximately 33% of total compensation out of all the companies we analyzed, while other remuneration made up 67% of the pie. According to our research, Duiba Group has allocated a higher percentage of pay to salary in comparison to the wider industry. 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.

Duiba Group Limited's Growth

Duiba Group Limited has seen its earnings per share (EPS) increase by 28% a year over the past three years. Its revenue is down 32% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Duiba Group Limited Been A Good Investment?

With a total shareholder return of -84% over three years, Duiba Group Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The loss to shareholders over the past three years is certainly concerning. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Duiba Group (1 is a bit concerning!) that you should be aware of before investing here.

Important note: Duiba Group 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.