Shareholders Will Probably Not Have Any Issues With United Strength Power Holdings Limited's (HKG:2337) CEO Compensation

Key Insights

• United Strength Power Holdings' Annual General Meeting to take place on 19th of June
• Salary of CN¥1.32m is part of CEO Jinmin Zhao's total remuneration
• The total compensation is 41% less than the average for the industry
• United Strength Power Holdings' three-year loss to shareholders was 72% while its EPS was down 33% over the past three years

The performance at United Strength Power Holdings Limited (HKG:2337) has been rather lacklustre of late and shareholders may be wondering what CEO Jinmin Zhao is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 19th of June. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

See our latest analysis for United Strength Power Holdings

How Does Total Compensation For Jinmin Zhao Compare With Other Companies In The Industry?

According to our data, United Strength Power Holdings Limited has a market capitalization of HK$1.4b, and paid its CEO total annual compensation worth CN¥1.4m over the year to December 2023. That's a notable increase of 17% on last year. We note that the salary portion, which stands at CN¥1.32m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Specialty Retail industry with market capitalizations ranging between HK$781m and HK$3.1b had a median total CEO compensation of CN¥2.3m. Accordingly, United Strength Power Holdings pays its CEO under the industry median. Furthermore, Jinmin Zhao directly owns HK$787m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.3m	CN¥1.1m	96%
Other	CN¥59k	CN¥52k	4%
Total Compensation	CN¥1.4m	CN¥1.2m	100%

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Investors will find it interesting that United Strength Power Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at United Strength Power Holdings Limited's Growth Numbers

United Strength Power Holdings Limited has reduced its earnings per share by 33% a year over the last three years. In the last year, its revenue is up 21%.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 United Strength Power Holdings Limited Been A Good Investment?

Few United Strength Power Holdings Limited shareholders would feel satisfied with the return of -72% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

United Strength Power Holdings pays its CEO a majority of compensation through a salary. The fact that shareholders are sitting on a loss is certainly disheartening. The downward trend in share price performance may be attributable to the the fact that earnings growth has gone backwards. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

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 United Strength Power Holdings that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.