We Discuss Why Jingrui Holdings Limited's (HKG:1862) CEO Compensation May Be Closely Reviewed

Key Insights

• Jingrui Holdings to hold its Annual General Meeting on 17th of June
• Total pay for CEO Hao Yan includes CN¥1.28m salary
• Total compensation is similar to the industry average
• Jingrui Holdings' EPS declined by 16% over the past three years while total shareholder loss over the past three years was 98%

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Jingrui Holdings Limited (HKG:1862) has not performed well recently and CEO Hao Yan will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 17th of June. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Jingrui Holdings

How Does Total Compensation For Hao Yan Compare With Other Companies In The Industry?

According to our data, Jingrui Holdings Limited has a market capitalization of HK$15m, and paid its CEO total annual compensation worth CN¥1.4m over the year to December 2024. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at CN¥1.28m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Real Estate industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.5m. This suggests that Jingrui Holdings remunerates its CEO largely in line with the industry average. Moreover, Hao Yan also holds HK$6.5m worth of Jingrui Holdings 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 82% of total compensation represents salary and 18% is other remuneration. Jingrui Holdings pays out 93% of remuneration in the form of a salary, significantly higher than the industry average. 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 Jingrui Holdings Limited's Growth Numbers

Over the last three years, Jingrui Holdings Limited has shrunk its earnings per share by 16% per year. It saw its revenue drop 19% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Jingrui Holdings Limited Been A Good Investment?

The return of -98% over three years would not have pleased Jingrui Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 2 which don't sit too well with us) in Jingrui 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.