We Think Shareholders May Consider Being More Generous With China Resources Land Limited's (HKG:1109) CEO Compensation Package

By
Simply Wall St
Published
June 02, 2021
SEHK:1109

The decent performance at China Resources Land Limited (HKG:1109) recently will please most shareholders as they go into the AGM coming up on 09 June 2021. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

Check out our latest analysis for China Resources Land

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

According to our data, China Resources Land Limited has a market capitalization of HK$262b, and paid its CEO total annual compensation worth CN¥6.9m over the year to December 2020. That's a notable decrease of 17% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥1.8m.

In comparison with other companies in the industry with market capitalizations over HK$62b , the reported median total CEO compensation was CN¥15m. This suggests that Xin Li is paid below the industry median. Furthermore, Xin Li directly owns HK$1.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary CN¥1.8m CN¥1.8m 26%
Other CN¥5.1m CN¥6.4m 74%
Total CompensationCN¥6.9m CN¥8.2m100%

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. China Resources Land pays a modest slice of remuneration through salary, as compared 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.

ceo-compensation
SEHK:1109 CEO Compensation June 2nd 2021

A Look at China Resources Land Limited's Growth Numbers

Over the past three years, China Resources Land Limited has seen its earnings per share (EPS) grow by 14% per year. Its revenue is up 21% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 China Resources Land Limited Been A Good Investment?

China Resources Land Limited has served shareholders reasonably well, with a total return of 31% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

While the company seems to be headed in the right direction performance-wise, there's always room for improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for China Resources Land you should be aware of, and 1 of them can't be ignored.

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. 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.
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