Here's Why Shareholders Should Examine Greentown Service Group Co. Ltd.'s (HKG:2869) CEO Compensation Package More Closely

Key Insights

• Greentown Service Group will host its Annual General Meeting on 20th of June
• Salary of CN¥1.78m is part of CEO Keli Jin's total remuneration
• The overall pay is comparable to the industry average
• Greentown Service Group's EPS declined by 6.6% over the past three years while total shareholder loss over the past three years was 41%

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The results at Greentown Service Group Co. Ltd. (HKG:2869) have been quite disappointing recently and CEO Keli Jin bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 20th of June. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Greentown Service Group

Comparing Greentown Service Group Co. Ltd.'s CEO Compensation With The Industry

Our data indicates that Greentown Service Group Co. Ltd. has a market capitalization of HK$14b, and total annual CEO compensation was reported as CN¥3.6m for the year to December 2024. We note that's an increase of 26% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥1.8m.

For comparison, other companies in the Hong Kong Real Estate industry with market capitalizations ranging between HK$7.8b and HK$25b had a median total CEO compensation of CN¥3.9m. This suggests that Greentown Service Group remunerates its CEO largely in line with the industry average. What's more, Keli Jin holds HK$18m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

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. Greentown Service Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Greentown Service Group Co. Ltd.'s Growth

Over the last three years, Greentown Service Group Co. Ltd. has shrunk its earnings per share by 6.6% per year. It achieved revenue growth of 6.4% over the last year.

The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Greentown Service Group Co. Ltd. Been A Good Investment?

Few Greentown Service Group Co. Ltd. shareholders would feel satisfied with the return of -41% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Greentown Service Group that investors should look into moving forward.

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.