The underwhelming share price performance of Chinney Investments, Limited (HKG:216) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 26 August 2021 and vote on resolutions including executive compensation, which studies show may have an impact on company performance. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.
How Does Total Compensation For Zuric Chan Compare With Other Companies In The Industry?
Our data indicates that Chinney Investments, Limited has a market capitalization of HK$987m, and total annual CEO compensation was reported as HK$9.1m for the year to March 2021. This means that the compensation hasn't changed much from last year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$9.1m.
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. Accordingly, our analysis reveals that Chinney Investments, Limited pays Zuric Chan north of the industry median.
On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. At the company level, Chinney Investments pays Zuric Chan solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Chinney Investments, Limited's Growth
Over the last three years, Chinney Investments, Limited has shrunk its earnings per share by 66% per year. Its revenue is up 100% over the last year.
The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Chinney Investments, Limited Been A Good Investment?
The return of -36% over three years would not have pleased Chinney Investments, Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
Chinney Investments pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Chinney Investments that you should be aware of before investing.
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.
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