Some Shareholders May Object To A Pay Rise For FriendTimes Inc.'s (HKG:6820) CEO This Year

Key Insights

• FriendTimes to hold its Annual General Meeting on 22nd of May
• Salary of CN¥1.38m is part of CEO Xiaohuang Jiang's total remuneration
• The overall pay is 51% below the industry average
• FriendTimes' EPS declined by 116% over the past three years while total shareholder loss over the past three years was 49%

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The underwhelming performance at FriendTimes Inc. (HKG:6820) recently has probably not pleased shareholders. At the upcoming AGM on 22nd of May, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.

See our latest analysis for FriendTimes

How Does Total Compensation For Xiaohuang Jiang Compare With Other Companies In The Industry?

At the time of writing, our data shows that FriendTimes Inc. has a market capitalization of HK$1.2b, and reported total annual CEO compensation of CN¥1.6m for the year to December 2024. That's a notable increase of 17% on last year. Notably, the salary which is CN¥1.38m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Entertainment industry with market capitalizations ranging from HK$781m to HK$3.1b, the reported median CEO total compensation was CN¥3.4m. In other words, FriendTimes pays its CEO lower than the industry median. What's more, Xiaohuang Jiang holds HK$761m 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	CN¥1.4m	CN¥1.1m	84%
Other	CN¥266k	CN¥263k	16%
Total Compensation	CN¥1.6m	CN¥1.4m	100%

On an industry level, around 85% of total compensation represents salary and 15% is other remuneration. There isn't a significant difference between FriendTimes and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at FriendTimes Inc.'s Growth Numbers

Over the last three years, FriendTimes Inc. has shrunk its earnings per share by 116% per year. Its revenue is up 10% over the last year.

Few shareholders would be pleased to read that EPS have declined. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has FriendTimes Inc. Been A Good Investment?

Few FriendTimes Inc. shareholders would feel satisfied with the return of -49% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for FriendTimes that investors should think about before committing capital to this stock.

Switching gears from FriendTimes, 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.