Shanghai Jiaoda Withub Information Industrial Company Limited's (HKG:8205) CEO Might Not Expect Shareholders To Be So Generous This Year

Shanghai Jiaoda Withub Information Industrial Company Limited (HKG:8205) has not performed well recently and CEO Ling Shang will probably need to up their game. At the upcoming AGM on 24 June 2021, shareholders can hear from the board including their plans for turning around performance. 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. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Shanghai Jiaoda Withub Information Industrial

Comparing Shanghai Jiaoda Withub Information Industrial Company Limited's CEO Compensation With the industry

At the time of writing, our data shows that Shanghai Jiaoda Withub Information Industrial Company Limited has a market capitalization of HK$106m, and reported total annual CEO compensation of CN¥1.8m for the year to December 2020. We note that's a decrease of 16% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥505k.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.7m. So it looks like Shanghai Jiaoda Withub Information Industrial compensates Ling Shang in line with the median for the industry.

Component	2020	2019	Proportion (2020)
Salary	CN¥505k	CN¥505k	27%
Other	CN¥1.3m	CN¥1.7m	73%
Total Compensation	CN¥1.8m	CN¥2.2m	100%

On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. It's interesting to note that Shanghai Jiaoda Withub Information Industrial allocates a smaller portion of compensation to salary in comparison 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 Shanghai Jiaoda Withub Information Industrial Company Limited's Growth Numbers

Shanghai Jiaoda Withub Information Industrial Company Limited has reduced its earnings per share by 19% a year over the last three years. In the last year, its revenue is down 34%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Shanghai Jiaoda Withub Information Industrial Company Limited Been A Good Investment?

Few Shanghai Jiaoda Withub Information Industrial Company Limited shareholders would feel satisfied with the return of -36% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Shanghai Jiaoda Withub Information Industrial you should be aware of, and 1 of them is a bit concerning.

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This article by Simply Wall St is general in nature. 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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