We Think Times Neighborhood Holdings Limited's (HKG:9928) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Times Neighborhood Holdings' Annual General Meeting to take place on 29th of May
• Salary of CN¥1.47m is part of CEO Meng Wang's total remuneration
• Total compensation is 79% above industry average
• Times Neighborhood Holdings' three-year loss to shareholders was 66% while its EPS was down 75% over the past three years

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Shareholders will probably not be too impressed with the underwhelming results at Times Neighborhood Holdings Limited (HKG:9928) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 29th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Times Neighborhood Holdings

How Does Total Compensation For Meng Wang Compare With Other Companies In The Industry?

At the time of writing, our data shows that Times Neighborhood Holdings Limited has a market capitalization of HK$511m, and reported total annual CEO compensation of CN¥2.7m for the year to December 2024. That's a notable decrease of 42% on last year. In particular, the salary of CN¥1.47m, makes up a fairly large portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Real Estate industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.5m. Accordingly, our analysis reveals that Times Neighborhood Holdings Limited pays Meng Wang north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	CN¥1.5m	CN¥2.3m	55%
Other	CN¥1.2m	CN¥2.4m	45%
Total Compensation	CN¥2.7m	CN¥4.7m	100%

On an industry level, roughly 82% of total compensation represents salary and 18% is other remuneration. In Times Neighborhood Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Times Neighborhood Holdings Limited's Growth Numbers

Times Neighborhood Holdings Limited has reduced its earnings per share by 75% a year over the last three years. It saw its revenue drop 3.3% over the last year.

The decline in EPS is a bit concerning. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Times Neighborhood Holdings Limited Been A Good Investment?

With a total shareholder return of -66% over three years, Times Neighborhood 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...

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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 1 which is a bit unpleasant) in Times Neighborhood Holdings we think you should know about.

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.