We Think Some Shareholders May Hesitate To Increase China Baoli Technologies Holdings Limited's (HKG:164) CEO Compensation

In the past three years, the share price of China Baoli Technologies Holdings Limited (HKG:164) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 30 September 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for China Baoli Technologies Holdings

How Does Total Compensation For Wei Ning Chu Compare With Other Companies In The Industry?

Our data indicates that China Baoli Technologies Holdings Limited has a market capitalization of HK$160m, and total annual CEO compensation was reported as HK$2.5m for the year to March 2021. That's a slight decrease of 6.8% on the prior year. In particular, the salary of HK$2.44m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.0m. This suggests that Wei Ning Chu is paid more than the median for the industry. Furthermore, Wei Ning Chu directly owns HK$1.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	HK$2.4m	HK$2.6m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$2.5m	HK$2.6m	100%

Talking in terms of the industry, salary represented approximately 75% of total compensation out of all the companies we analyzed, while other remuneration made up 25% of the pie. China Baoli Technologies Holdings has gone down a largely traditional route, paying Wei Ning Chu a high salary, giving it preference over 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 China Baoli Technologies Holdings Limited's Growth Numbers

Over the past three years, China Baoli Technologies Holdings Limited has seen its earnings per share (EPS) grow by 37% per year. In the last year, its revenue is up 11%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has China Baoli Technologies Holdings Limited Been A Good Investment?

With a total shareholder return of -93% over three years, China Baoli Technologies Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

China Baoli Technologies Holdings pays its CEO a majority of compensation through a salary. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 5 warning signs for China Baoli Technologies Holdings (3 are a bit concerning!) that you should be aware of before investing here.

Important note: China Baoli Technologies 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.
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