Shareholders May Be Wary Of Increasing China Yongda Automobiles Services Holdings Limited's (HKG:3669) CEO Compensation Package

Key Insights

• China Yongda Automobiles Services Holdings will host its Annual General Meeting on 5th of June
• CEO Yue Xu's total compensation includes salary of CN¥1.15m
• Total compensation is 124% above industry average
• China Yongda Automobiles Services Holdings' EPS declined by 28% over the past three years while total shareholder loss over the past three years was 83%

China Yongda Automobiles Services Holdings Limited (HKG:3669) has not performed well recently and CEO Yue Xu will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 5th of June. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for China Yongda Automobiles Services Holdings

Comparing China Yongda Automobiles Services Holdings Limited's CEO Compensation With The Industry

According to our data, China Yongda Automobiles Services Holdings Limited has a market capitalization of HK$3.9b, and paid its CEO total annual compensation worth CN¥5.3m over the year to December 2023. Notably, that's a decrease of 24% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥1.2m.

On comparing similar companies from the Hong Kong Specialty Retail industry with market caps ranging from HK$1.6b to HK$6.2b, we found that the median CEO total compensation was CN¥2.3m. Hence, we can conclude that Yue Xu is remunerated higher than the industry median. Furthermore, Yue Xu directly owns HK$9.1m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. China Yongda Automobiles Services Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at China Yongda Automobiles Services Holdings Limited's Growth Numbers

Over the last three years, China Yongda Automobiles Services Holdings Limited has shrunk its earnings per share by 28% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

The decline in EPS is a bit concerning. And the flat revenue is seriously uninspiring. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has China Yongda Automobiles Services Holdings Limited Been A Good Investment?

Few China Yongda Automobiles Services Holdings Limited shareholders would feel satisfied with the return of -83% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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. That's why we did some digging and identified 2 warning signs for China Yongda Automobiles Services Holdings that you should be aware of before investing.

Switching gears from China Yongda Automobiles Services 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. 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.