Here's Why COSCO SHIPPING Holdings Co., Ltd.'s (HKG:1919) CEO Compensation Is The Least Of Shareholders Concerns

Key Insights

• COSCO SHIPPING Holdings to hold its Annual General Meeting on 29th of May
• CEO Zhijian Yang's total compensation includes salary of CN¥5.13m
• Total compensation is 47% below industry average
• Over the past three years, COSCO SHIPPING Holdings' EPS fell by 3.6% and over the past three years, the total shareholder return was 99%

The performance at COSCO SHIPPING Holdings Co., Ltd. (HKG:1919) has been rather lacklustre of late and shareholders may be wondering what CEO Zhijian Yang is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 29th of May. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for COSCO SHIPPING Holdings

Comparing COSCO SHIPPING Holdings Co., Ltd.'s CEO Compensation With The Industry

According to our data, COSCO SHIPPING Holdings Co., Ltd. has a market capitalization of HK$233b, and paid its CEO total annual compensation worth CN¥7.5m over the year to December 2023. That's just a smallish increase of 6.4% on last year. In particular, the salary of CN¥5.13m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Shipping industry with market capitalizations over HK$62b, the reported median total CEO compensation was CN¥14m. This suggests that Zhijian Yang is paid below the industry median. Furthermore, Zhijian Yang directly owns HK$12m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CN¥5.1m	CN¥4.7m	68%
Other	CN¥2.4m	CN¥2.3m	32%
Total Compensation	CN¥7.5m	CN¥7.1m	100%

Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. COSCO SHIPPING Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. 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.

A Look at COSCO SHIPPING Holdings Co., Ltd.'s Growth Numbers

COSCO SHIPPING Holdings Co., Ltd. has reduced its earnings per share by 3.6% a year over the last three years. Its revenue is down 47% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has COSCO SHIPPING Holdings Co., Ltd. Been A Good Investment?

Boasting a total shareholder return of 99% over three years, COSCO SHIPPING Holdings Co., Ltd. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us wonder if these strong returns can continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for COSCO SHIPPING Holdings (1 shouldn't be ignored!) that you should be aware of before investing here.

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.