Should Shareholders Reconsider Sino-Ocean Group Holding Limited's (HKG:3377) CEO Compensation Package?

Key Insights

• Sino-Ocean Group Holding will host its Annual General Meeting on 23rd of May
• Salary of CN¥6.29m is part of CEO Ming Li's total remuneration
• The overall pay is 182% above the industry average
• Sino-Ocean Group Holding's EPS declined by 37% over the past three years while total shareholder loss over the past three years was 92%

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Shareholders will probably not be too impressed with the underwhelming results at Sino-Ocean Group Holding Limited (HKG:3377) recently. At the upcoming AGM on 23rd of May, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Sino-Ocean Group Holding

How Does Total Compensation For Ming Li Compare With Other Companies In The Industry?

At the time of writing, our data shows that Sino-Ocean Group Holding Limited has a market capitalization of HK$1.2b, and reported total annual CEO compensation of CN¥7.4m for the year to December 2024. We note that's a decrease of 8.3% compared to last year. In particular, the salary of CN¥6.29m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Real Estate industry with market capitalizations ranging between HK$781m and HK$3.1b had a median total CEO compensation of CN¥2.6m. This suggests that Ming Li is paid more than the median for the industry. What's more, Ming Li holds HK$25m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	CN¥6.3m	CN¥5.8m	85%
Other	CN¥1.1m	CN¥2.3m	15%
Total Compensation	CN¥7.4m	CN¥8.1m	100%

On an industry level, around 82% of total compensation represents salary and 18% is other remuneration. Sino-Ocean Group Holding is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Sino-Ocean Group Holding Limited's Growth

Sino-Ocean Group Holding Limited has reduced its earnings per share by 37% a year over the last three years. It saw its revenue drop 49% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Sino-Ocean Group Holding Limited Been A Good Investment?

With a total shareholder return of -92% over three years, Sino-Ocean Group Holding Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for Sino-Ocean Group Holding 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.