This Is Why Xinming China Holdings Limited's (HKG:2699) CEO Compensation Looks Appropriate

Key Insights

• Xinming China Holdings will host its Annual General Meeting on 23rd of May
• CEO Chengshou Chen's total compensation includes salary of CN¥983.0k
• The overall pay is 35% below the industry average
• Over the past three years, Xinming China Holdings' EPS grew by 33% and over the past three years, the total loss to shareholders 45%

We've discovered 4 warning signs about Xinming China Holdings. View them for free.

The performance at Xinming China Holdings Limited (HKG:2699) has been rather lacklustre of late and shareholders may be wondering what CEO Chengshou 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 23rd 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 think CEO compensation looks appropriate given the data we have put together.

See our latest analysis for Xinming China Holdings

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

At the time of writing, our data shows that Xinming China Holdings Limited has a market capitalization of HK$39m, and reported total annual CEO compensation of CN¥983k for the year to December 2024. There was no change in the compensation compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth CN¥983k.

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 CN¥1.5m. That is to say, Chengshou Chen is paid under the industry median. Furthermore, Chengshou Chen directly owns HK$511k worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2024	Proportion (2024)
Salary	CN¥983k	CN¥983k	100%
Other	-	-	-
Total Compensation	CN¥983k	CN¥983k	100%

On an industry level, roughly 82% of total compensation represents salary and 18% is other remuneration. On a company level, Xinming China Holdings prefers to reward its CEO through a salary, opting not to pay Chengshou Chen through non-salary benefits. 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.

A Look at Xinming China Holdings Limited's Growth Numbers

Xinming China Holdings Limited has seen its earnings per share (EPS) increase by 33% a year over the past three years. Its revenue is down 79% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Xinming China Holdings Limited Been A Good Investment?

The return of -45% over three years would not have pleased Xinming China Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Xinming China Holdings pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The fact that shareholders are sitting on a loss is certainly disheartening. 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 focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 4 warning signs for Xinming China Holdings that you should be aware of before investing.

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.