Increases to CEO Compensation Might Be Put On Hold For Now at Tian An China Investments Company Limited (HKG:28)

Key Insights

• Tian An China Investments to hold its Annual General Meeting on 21st of May
• CEO Patrick Lee's total compensation includes salary of HK$3.68m
• Total compensation is 114% above industry average
• Tian An China Investments' EPS declined by 39% over the past three years while total shareholder return over the past three years was 39%

We've discovered 1 warning sign about Tian An China Investments. View them for free.

Tian An China Investments Company Limited (HKG:28) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 21st of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for Tian An China Investments

How Does Total Compensation For Patrick Lee Compare With Other Companies In The Industry?

Our data indicates that Tian An China Investments Company Limited has a market capitalization of HK$6.6b, and total annual CEO compensation was reported as HK$6.5m for the year to December 2024. We note that's a small decrease of 6.5% on last year. We note that the salary of HK$3.68m makes up a sizeable portion of the total compensation received by the CEO.

On examining similar-sized companies in the Hong Kong Real Estate industry with market capitalizations between HK$3.1b and HK$12b, we discovered that the median CEO total compensation of that group was HK$3.0m. Accordingly, our analysis reveals that Tian An China Investments Company Limited pays Patrick Lee north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	HK$3.7m	HK$3.4m	57%
Other	HK$2.8m	HK$3.5m	43%
Total Compensation	HK$6.5m	HK$6.9m	100%

Talking in terms of the industry, salary represented approximately 82% of total compensation out of all the companies we analyzed, while other remuneration made up 18% of the pie. Tian An China Investments pays a modest slice of remuneration through salary, as compared to the broader 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.

Tian An China Investments Company Limited's Growth

Tian An China Investments Company Limited has reduced its earnings per share by 39% a year over the last three years. It achieved revenue growth of 8.3% over the last year.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. 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 Tian An China Investments Company Limited Been A Good Investment?

Boasting a total shareholder return of 39% over three years, Tian An China Investments Company Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Tian An China Investments that investors should think about before committing capital to this stock.

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.