Shareholders Will Likely Find Great China Holdings (Hong Kong) Limited's (HKG:21) CEO Compensation Acceptable

Key Insights

• Great China Holdings (Hong Kong)'s Annual General Meeting to take place on 7th of June
• CEO Wenxi Huang's total compensation includes salary of HK$452.0k
• The total compensation is 66% less than the average for the industry
• Over the past three years, Great China Holdings (Hong Kong)'s EPS grew by 102% and over the past three years, the total loss to shareholders 38%

Shareholders may be wondering what CEO Wenxi Huang plans to do to improve the less than great performance at Great China Holdings (Hong Kong) Limited (HKG:21) recently. At the next AGM coming up on 7th of June, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for Great China Holdings (Hong Kong)

How Does Total Compensation For Wenxi Huang Compare With Other Companies In The Industry?

At the time of writing, our data shows that Great China Holdings (Hong Kong) Limited has a market capitalization of HK$517m, and reported total annual CEO compensation of HK$620k for the year to December 2023. That's a fairly small increase of 6.0% over the previous year. We note that the salary portion, which stands at HK$452.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Hong Kong Real Estate industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.8m. Accordingly, Great China Holdings (Hong Kong) pays its CEO under the industry median. What's more, Wenxi Huang holds HK$83m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	HK$452k	HK$417k	73%
Other	HK$168k	HK$168k	27%
Total Compensation	HK$620k	HK$585k	100%

On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. Our data reveals that Great China Holdings (Hong Kong) allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Great China Holdings (Hong Kong) Limited's Growth Numbers

Over the past three years, Great China Holdings (Hong Kong) Limited has seen its earnings per share (EPS) grow by 102% per year. It achieved revenue growth of 90% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Great China Holdings (Hong Kong) Limited Been A Good Investment?

The return of -38% over three years would not have pleased Great China Holdings (Hong Kong) Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The loss to shareholders over the past three years is certainly concerning. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. A key question may be why the fundamentals have not yet been reflected into the share price. 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. That's why we did our research, and identified 3 warning signs for Great China Holdings (Hong Kong) (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.