Greenland Hong Kong Holdings Limited's (HKG:337) CEO Compensation Is Looking A Bit Stretched At The Moment

In the past three years, the share price of Greenland Hong Kong Holdings Limited (HKG:337) has struggled to generate growth for its shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 30 June 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Greenland Hong Kong Holdings

Comparing Greenland Hong Kong Holdings Limited's CEO Compensation With the industry

According to our data, Greenland Hong Kong Holdings Limited has a market capitalization of HK$7.0b, and paid its CEO total annual compensation worth CN¥6.8m over the year to December 2020. We note that's an increase of 10% above last year. We note that the salary of CN¥3.89m makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between HK$3.1b and HK$12b had a median total CEO compensation of CN¥3.7m. Hence, we can conclude that Jun Chen is remunerated higher than the industry median. What's more, Jun Chen holds HK$8.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	CN¥3.9m	CN¥4.2m	57%
Other	CN¥2.9m	CN¥2.0m	43%
Total Compensation	CN¥6.8m	CN¥6.2m	100%

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. It's interesting to note that Greenland Hong Kong Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Greenland Hong Kong Holdings Limited's Growth

Greenland Hong Kong Holdings Limited has seen its earnings per share (EPS) increase by 27% a year over the past three years. Its revenue is down 7.4% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Greenland Hong Kong Holdings Limited Been A Good Investment?

With a three year total loss of 0.3% for the shareholders, Greenland Hong Kong Holdings Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At 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 will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Greenland Hong Kong Holdings (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Greenland Hong Kong Holdings, 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.

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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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