This Is Why AInnovation Technology Group Co., Ltd's (HKG:2121) CEO Compensation Looks Appropriate

Key Insights

• AInnovation Technology Group will host its Annual General Meeting on 16th of May
• CEO Hui Xu's total compensation includes salary of CN¥1.64m
• The overall pay is 50% below the industry average
• Over the past three years, AInnovation Technology Group's EPS grew by 4.2% and over the past three years, the total loss to shareholders 77%

We've discovered 2 warning signs about AInnovation Technology Group. View them for free.

Performance at AInnovation Technology Group Co., Ltd (HKG:2121) has been rather uninspiring recently and shareholders may be wondering how CEO Hui Xu plans to fix 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 16th of May. 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 AInnovation Technology Group

Comparing AInnovation Technology Group Co., Ltd's CEO Compensation With The Industry

According to our data, AInnovation Technology Group Co., Ltd has a market capitalization of HK$2.2b, and paid its CEO total annual compensation worth CN¥1.8m over the year to December 2024. Notably, that's a decrease of 32% over the year before. We note that the salary portion, which stands at CN¥1.64m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the Hong Kong Software industry with market caps ranging from HK$778m to HK$3.1b, we found that the median CEO total compensation was CN¥3.6m. In other words, AInnovation Technology Group pays its CEO lower than the industry median. Moreover, Hui Xu also holds HK$380m worth of AInnovation Technology Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	CN¥1.6m	CN¥2.5m	92%
Other	CN¥136k	CN¥134k	8%
Total Compensation	CN¥1.8m	CN¥2.6m	100%

Speaking on an industry level, nearly 68% of total compensation represents salary, while the remainder of 32% is other remuneration. According to our research, AInnovation Technology Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at AInnovation Technology Group Co., Ltd's Growth Numbers

AInnovation Technology Group Co., Ltd has seen its earnings per share (EPS) increase by 4.2% a year over the past three years. It saw its revenue drop 30% over the last year.

We generally like to see a little revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 AInnovation Technology Group Co., Ltd Been A Good Investment?

With a total shareholder return of -77% over three years, AInnovation Technology Group Co., Ltd shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders are sitting on a loss is certainly disheartening. Perhaps the poor price performance may have something to do with the the fact that earnings per share growth has not been performing as strongly either. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for AInnovation Technology Group that investors should look into moving forward.

Important note: AInnovation Technology Group 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.