Shareholders Will Probably Hold Off On Increasing Yangtze Optical Fibre And Cable Joint Stock Limited Company's (HKG:6869) CEO Compensation For The Time Being

Key Insights

• Yangtze Optical Fibre And Cable Limited to hold its Annual General Meeting on 18th of June
• Salary of CN¥1.90m is part of CEO Dan Zhuang's total remuneration
• The overall pay is 317% above the industry average
• Over the past three years, Yangtze Optical Fibre And Cable Limited's EPS grew by 21% and over the past three years, the total loss to shareholders 7.8%

In the past three years, shareholders of Yangtze Optical Fibre And Cable Joint Stock Limited Company (HKG:6869) have seen a loss on their investment. 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 18th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Yangtze Optical Fibre And Cable Limited

Comparing Yangtze Optical Fibre And Cable Joint Stock Limited Company's CEO Compensation With The Industry

At the time of writing, our data shows that Yangtze Optical Fibre And Cable Joint Stock Limited Company has a market capitalization of HK$14b, and reported total annual CEO compensation of CN¥5.8m for the year to December 2023. We note that's an increase of 14% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥1.9m.

In comparison with other companies in the Hong Kong Communications industry with market capitalizations ranging from HK$7.8b to HK$25b, the reported median CEO total compensation was CN¥1.4m. Accordingly, our analysis reveals that Yangtze Optical Fibre And Cable Joint Stock Limited Company pays Dan Zhuang north of the industry median. Furthermore, Dan Zhuang directly owns HK$6.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.9m	CN¥1.9m	32%
Other	CN¥3.9m	CN¥3.2m	68%
Total Compensation	CN¥5.8m	CN¥5.1m	100%

On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. Yangtze Optical Fibre And Cable Limited sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Yangtze Optical Fibre And Cable Joint Stock Limited Company's Growth Numbers

Yangtze Optical Fibre And Cable Joint Stock Limited Company has seen its earnings per share (EPS) increase by 21% a year over the past three years. In the last year, its revenue is down 11%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Yangtze Optical Fibre And Cable Joint Stock Limited Company Been A Good Investment?

With a three year total loss of 7.8% for the shareholders, Yangtze Optical Fibre And Cable Joint Stock Limited Company would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Yangtze Optical Fibre And Cable Limited (1 is a bit unpleasant!) that you should be aware of before investing here.

Important note: Yangtze Optical Fibre And Cable Limited 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.