We Discuss Why Yuexiu Transport Infrastructure Limited's (HKG:1052) CEO Compensation May Be Closely Reviewed

The results at Yuexiu Transport Infrastructure Limited (HKG:1052) have been quite disappointing recently and CEO Baiqing He bears some responsibility for this. At the upcoming AGM on 02 June 2021, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Yuexiu Transport Infrastructure

Comparing Yuexiu Transport Infrastructure Limited's CEO Compensation With the industry

At the time of writing, our data shows that Yuexiu Transport Infrastructure Limited has a market capitalization of HK$8.0b, and reported total annual CEO compensation of CN¥3.0m for the year to December 2020. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥568k.

For comparison, other companies in the same industry with market capitalizations ranging between HK$3.1b and HK$12b had a median total CEO compensation of CN¥2.3m. So it looks like Yuexiu Transport Infrastructure compensates Baiqing He in line with the median for the industry.

Component	2020	2019	Proportion (2020)
Salary	CN¥568k	CN¥564k	19%
Other	CN¥2.4m	CN¥2.4m	81%
Total Compensation	CN¥3.0m	CN¥3.0m	100%

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. Yuexiu Transport Infrastructure 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 Yuexiu Transport Infrastructure Limited's Growth Numbers

Over the last three years, Yuexiu Transport Infrastructure Limited has shrunk its earnings per share by 45% per year. Its revenue is down 3.5% over the previous year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Yuexiu Transport Infrastructure Limited Been A Good Investment?

With a three year total loss of 6.9% for the shareholders, Yuexiu Transport Infrastructure Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Yuexiu Transport Infrastructure (1 shouldn't be ignored!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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