Shareholders May Be Wary Of Increasing Beijing Properties (Holdings) Limited's (HKG:925) CEO Compensation Package

Key Insights

• Beijing Properties (Holdings) will host its Annual General Meeting on 14th of June
• Total pay for CEO Michael Siu includes CN¥1.47m salary
• Total compensation is similar to the industry average
• Beijing Properties (Holdings)'s three-year loss to shareholders was 42% while its EPS was down 37% over the past three years

Beijing Properties (Holdings) Limited (HKG:925) has not performed well recently and CEO Michael Siu will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 14th 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.

Check out our latest analysis for Beijing Properties (Holdings)

How Does Total Compensation For Michael Siu Compare With Other Companies In The Industry?

At the time of writing, our data shows that Beijing Properties (Holdings) Limited has a market capitalization of HK$446m, and reported total annual CEO compensation of CN¥1.5m for the year to December 2023. That's a modest increase of 5.4% on the prior year. Notably, the salary which is CN¥1.47m, represents most of the total compensation being paid.

On comparing similar-sized companies in the Hong Kong Real Estate industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.7m. So it looks like Beijing Properties (Holdings) compensates Michael Siu in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.5m	CN¥1.3m	97%
Other	CN¥50k	CN¥176k	3%
Total Compensation	CN¥1.5m	CN¥1.4m	100%

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. Beijing Properties (Holdings) is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Beijing Properties (Holdings) Limited's Growth

Over the last three years, Beijing Properties (Holdings) Limited has shrunk its earnings per share by 37% per year. In the last year, its revenue is up 6.0%.

Few shareholders would be pleased to read that EPS have declined. 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 Beijing Properties (Holdings) Limited Been A Good Investment?

With a total shareholder return of -42% over three years, Beijing Properties (Holdings) Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Michael receives almost all of their compensation through a salary. 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, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which is significant) in Beijing Properties (Holdings) we think you should know about.

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.