Here's Why China Overseas Land & Investment Limited's (HKG:688) CEO May Not Expect A Pay Rise This Year

Key Insights

• China Overseas Land & Investment to hold its Annual General Meeting on 21st of June
• Salary of CN¥2.26m is part of CEO ZhiChao Zhang's total remuneration
• The overall pay is 55% below the industry average
• Over the past three years, China Overseas Land & Investment's EPS fell by 16% and over the past three years, the total loss to shareholders 10.0%

The disappointing performance at China Overseas Land & Investment Limited (HKG:688) will make some shareholders rather disheartened. The next AGM coming up on 21st of June will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. From our analysis below, we think CEO compensation looks appropriate for now.

View our latest analysis for China Overseas Land & Investment

Comparing China Overseas Land & Investment Limited's CEO Compensation With The Industry

At the time of writing, our data shows that China Overseas Land & Investment Limited has a market capitalization of HK$158b, and reported total annual CEO compensation of CN¥5.6m for the year to December 2023. We note that's a decrease of 16% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥2.3m.

In comparison with other companies in the Hong Kong Real Estate industry with market capitalizations over HK$62b, the reported median total CEO compensation was CN¥13m. Accordingly, China Overseas Land & Investment pays its CEO under the industry median.

Component	2023	2022	Proportion (2023)
Salary	CN¥2.3m	CN¥2.1m	40%
Other	CN¥3.4m	CN¥4.6m	60%
Total Compensation	CN¥5.6m	CN¥6.7m	100%

On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. In China Overseas Land & 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 China Overseas Land & Investment Limited's Growth Numbers

Over the last three years, China Overseas Land & Investment Limited has shrunk its earnings per share by 16% per year. In the last year, its revenue is up 12%.

Few shareholders would be pleased to read that EPS have declined. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has China Overseas Land & Investment Limited Been A Good Investment?

With a three year total loss of 10.0% for the shareholders, China Overseas Land & Investment Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 1 warning sign for China Overseas Land & Investment 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com