China MeiDong Auto Holdings Limited's (HKG:1268) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• China MeiDong Auto Holdings will host its Annual General Meeting on 14th of May
• Total pay for CEO Tao Ye includes CN¥2.42m salary
• The overall pay is 38% above the industry average
• Over the past three years, China MeiDong Auto Holdings' EPS fell by 45% and over the past three years, the total loss to shareholders 92%

Shareholders will probably not be too impressed with the underwhelming results at China MeiDong Auto Holdings Limited (HKG:1268) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 14th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for China MeiDong Auto Holdings

How Does Total Compensation For Tao Ye Compare With Other Companies In The Industry?

Our data indicates that China MeiDong Auto Holdings Limited has a market capitalization of HK$3.8b, and total annual CEO compensation was reported as CN¥5.4m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥2.4m.

On comparing similar companies from the Hong Kong Specialty Retail industry with market caps ranging from HK$1.6b to HK$6.3b, we found that the median CEO total compensation was CN¥3.9m. Accordingly, our analysis reveals that China MeiDong Auto Holdings Limited pays Tao Ye north of the industry median. Furthermore, Tao Ye directly owns HK$5.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥2.4m	CN¥2.4m	45%
Other	CN¥3.0m	CN¥3.0m	55%
Total Compensation	CN¥5.4m	CN¥5.4m	100%

Talking in terms of the industry, salary represented approximately 87% of total compensation out of all the companies we analyzed, while other remuneration made up 13% of the pie. China MeiDong Auto Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

China MeiDong Auto Holdings Limited's Growth

Over the last three years, China MeiDong Auto Holdings Limited has shrunk its earnings per share by 45% per year. Revenue was pretty flat on last year.

Few shareholders would be pleased to read that EPS have declined. And the flat revenue hardly impresses. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 MeiDong Auto Holdings Limited Been A Good Investment?

Few China MeiDong Auto Holdings Limited shareholders would feel satisfied with the return of -92% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for China MeiDong Auto Holdings that investors should look into moving forward.

Important note: China MeiDong Auto Holdings 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.