We Think Shareholders Are Less Likely To Approve A Large Pay Rise For China Dili Group's (HKG:1387) CEO For Now

Under the guidance of CEO Bin Dai, China Dili Group (HKG:1387) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 24 June 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for China Dili Group

Comparing China Dili Group's CEO Compensation With the industry

At the time of writing, our data shows that China Dili Group has a market capitalization of HK$19b, and reported total annual CEO compensation of CN¥28m for the year to December 2020. We note that's an increase of 48% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥4.0m.

On examining similar-sized companies in the industry with market capitalizations between HK$16b and HK$50b, we discovered that the median CEO total compensation of that group was CN¥5.2m. Accordingly, our analysis reveals that China Dili Group pays Bin Dai north of the industry median.

Component	2020	2019	Proportion (2020)
Salary	CN¥4.0m	CN¥4.3m	15%
Other	CN¥24m	CN¥14m	85%
Total Compensation	CN¥28m	CN¥19m	100%

On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. It's interesting to note that China Dili Group allocates a smaller portion of compensation to salary 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 Dili Group's Growth Numbers

Over the past three years, China Dili Group has seen its earnings per share (EPS) grow by 88% per year. In the last year, its revenue is up 1.7%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has China Dili Group Been A Good Investment?

Boasting a total shareholder return of 43% over three years, China Dili Group has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for China Dili Group you should be aware of, and 1 of them makes us a bit uncomfortable.

Switching gears from China Dili Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

If you’re looking to trade a wide range of investments, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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