Gemdale Properties and Investment Corporation Limited's (HKG:535) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• Gemdale Properties and Investment's Annual General Meeting to take place on 19th of April
• Total pay for CEO Jiajun Xu includes CN¥721.0k salary
• Total compensation is 53% below industry average
• Gemdale Properties and Investment's EPS declined by 57% over the past three years while total shareholder loss over the past three years was 75%

Performance at Gemdale Properties and Investment Corporation Limited (HKG:535) has been rather uninspiring recently and shareholders may be wondering how CEO Jiajun Xu plans to fix this. At the next AGM coming up on 19th of April, 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.

Check out our latest analysis for Gemdale Properties and Investment

How Does Total Compensation For Jiajun Xu Compare With Other Companies In The Industry?

Our data indicates that Gemdale Properties and Investment Corporation Limited has a market capitalization of HK$4.1b, and total annual CEO compensation was reported as CN¥1.8m for the year to December 2023. Notably, that's a decrease of 18% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥721k.

For comparison, other companies in the Hong Kong Real Estate industry with market capitalizations ranging between HK$1.6b and HK$6.3b had a median total CEO compensation of CN¥3.8m. In other words, Gemdale Properties and Investment pays its CEO lower than the industry median. Furthermore, Jiajun Xu directly owns HK$31m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥721k	CN¥689k	40%
Other	CN¥1.1m	CN¥1.5m	60%
Total Compensation	CN¥1.8m	CN¥2.2m	100%

Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. In Gemdale Properties and Investment's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Gemdale Properties and Investment Corporation Limited's Growth Numbers

Over the last three years, Gemdale Properties and Investment Corporation Limited has shrunk its earnings per share by 57% per year. In the last year, its revenue is up 69%.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Gemdale Properties and Investment Corporation Limited Been A Good Investment?

With a total shareholder return of -75% over three years, Gemdale Properties and Investment Corporation Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The loss to shareholders over the past three years is certainly concerning. The poor performance of the share price might have something to do with the lack of earnings growth. 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.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for Gemdale Properties and Investment (of which 2 are a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Important note: Gemdale Properties and Investment is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.