Should Shareholders Reconsider Tianli Holdings Group Limited's (HKG:117) CEO Compensation Package?

Key Insights

• Tianli Holdings Group will host its Annual General Meeting on 20th of June
• Salary of CN¥2.19m is part of CEO Tong Pan's total remuneration
• The total compensation is similar to the average for the industry
• Tianli Holdings Group's EPS declined by 79% over the past three years while total shareholder loss over the past three years was 30%

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Tianli Holdings Group Limited (HKG:117) has not performed well recently and CEO Tong Pan will probably need to up their game. At the upcoming AGM on 20th of June, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Tianli Holdings Group

How Does Total Compensation For Tong Pan Compare With Other Companies In The Industry?

According to our data, Tianli Holdings Group Limited has a market capitalization of HK$235m, and paid its CEO total annual compensation worth CN¥2.2m over the year to December 2024. That's slightly lower by 3.2% over the previous year. In particular, the salary of CN¥2.19m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Electronic industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥2.2m. This suggests that Tianli Holdings Group remunerates its CEO largely in line with the industry average.

Component	2024	2023	Proportion (2024)
Salary	CN¥2.2m	CN¥2.2m	99%
Other	CN¥30k	CN¥130k	1%
Total Compensation	CN¥2.2m	CN¥2.3m	100%

On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. Tianli Holdings Group is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to 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 Tianli Holdings Group Limited's Growth Numbers

Tianli Holdings Group Limited has reduced its earnings per share by 79% a year over the last three years. In the last year, its revenue is up 12%.

Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Tianli Holdings Group Limited Been A Good Investment?

Given the total shareholder loss of 30% over three years, many shareholders in Tianli Holdings Group Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Tianli Holdings Group pays its CEO a majority of compensation through a salary. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 2 which shouldn't be ignored) in Tianli Holdings Group we think you should know about.

Switching gears from Tianli Holdings Group, 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.