The underwhelming share price performance of Coastal Greenland Limited (HKG:1124) in the past three years would have disappointed many shareholders. Per share earnings growth is also poor, despite revenues growing. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 17 September 2021, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.
How Does Total Compensation For Ming Jiang Compare With Other Companies In The Industry?
According to our data, Coastal Greenland Limited has a market capitalization of HK$253m, and paid its CEO total annual compensation worth HK$2.3m over the year to March 2021. We note that's an increase of 14% above last year. We note that the salary portion, which stands at HK$2.27m constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.9m. So it looks like Coastal Greenland compensates Ming Jiang in line with the median for the industry.
Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. Coastal Greenland has gone down a largely traditional route, paying Ming Jiang a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Coastal Greenland Limited's Growth
Over the last three years, Coastal Greenland Limited has shrunk its earnings per share by 95% per year. It achieved revenue growth of 319% over the last year.
Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Coastal Greenland Limited Been A Good Investment?
With a total shareholder return of -74% over three years, Coastal Greenland Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
Ming receives almost all of their compensation through a salary. The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.
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 3 warning signs for Coastal Greenland (of which 2 are significant!) that you should know about in order to have a holistic understanding of the stock.
Important note: Coastal Greenland 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.
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