There Could Be A Chance Chengdu Expressway Co., Ltd.'s (HKG:1785) CEO Will Have Their Compensation Increased

Key Insights

• Chengdu Expressway will host its Annual General Meeting on 28th of May
• Total pay for CEO Tan Yang includes CN¥365.8k salary
• Total compensation is 39% below industry average
• Over the past three years, Chengdu Expressway's EPS grew by 2.1% and over the past three years, the total shareholder return was 30%

Shareholders will be pleased by the robust performance of Chengdu Expressway Co., Ltd. (HKG:1785) recently and this will be kept in mind in the upcoming AGM on 28th of May. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

Check out our latest analysis for Chengdu Expressway

Comparing Chengdu Expressway Co., Ltd.'s CEO Compensation With The Industry

Our data indicates that Chengdu Expressway Co., Ltd. has a market capitalization of HK$3.7b, and total annual CEO compensation was reported as CN¥579k for the year to December 2023. Notably, that's a decrease of 9.5% over the year before. We note that the salary portion, which stands at CN¥365.8k constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the Hong Kong Infrastructure industry with market capitalizations between HK$1.6b and HK$6.2b, we discovered that the median CEO total compensation of that group was CN¥956k. This suggests that Tan Yang is paid below the industry median.

Component	2023	2022	Proportion (2023)
Salary	CN¥366k	CN¥367k	63%
Other	CN¥214k	CN¥273k	37%
Total Compensation	CN¥579k	CN¥640k	100%

Talking in terms of the industry, salary represented approximately 65% of total compensation out of all the companies we analyzed, while other remuneration made up 35% of the pie. There isn't a significant difference between Chengdu Expressway and the broader market, in terms of salary allocation in the overall compensation package. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Chengdu Expressway Co., Ltd.'s Growth

Over the past three years, Chengdu Expressway Co., Ltd. has seen its earnings per share (EPS) grow by 2.1% per year. Its revenue is up 14% over the last year.

We would argue that the modest growth in revenue is a notable positive. And the improvement in EPSis modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Chengdu Expressway Co., Ltd. Been A Good Investment?

With a total shareholder return of 30% over three years, Chengdu Expressway Co., Ltd. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

While the company seems to be headed in the right direction performance-wise, there's always room for improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Chengdu Expressway that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.