Most Shareholders Will Probably Agree With Shenzhen Expressway Corporation Limited's (HKG:548) CEO Compensation

Key Insights

• Shenzhen Expressway will host its Annual General Meeting on 25th of June
• CEO Xiang Wen Liao's total compensation includes salary of CN¥1.17m
• Total compensation is similar to the industry average
• Over the past three years, Shenzhen Expressway's EPS fell by 3.9% and over the past three years, the total shareholder return was 22%

The share price of Shenzhen Expressway Corporation Limited (HKG:548) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 25th of June. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Shenzhen Expressway

Comparing Shenzhen Expressway Corporation Limited's CEO Compensation With The Industry

According to our data, Shenzhen Expressway Corporation Limited has a market capitalization of HK$22b, and paid its CEO total annual compensation worth CN¥1.2m over the year to December 2023. Notably, that's a decrease of 18% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth CN¥1.2m.

For comparison, other companies in the Hong Kong Infrastructure industry with market capitalizations ranging between HK$16b and HK$50b had a median total CEO compensation of CN¥1.1m. So it looks like Shenzhen Expressway compensates Xiang Wen Liao in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	CN¥1.2m	CN¥1.2m	100%
Other	-	CN¥239k	-
Total Compensation	CN¥1.2m	CN¥1.4m	100%

On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. On a company level, Shenzhen Expressway prefers to reward its CEO through a salary, opting not to pay Xiang Wen Liao through non-salary benefits. 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.

Shenzhen Expressway Corporation Limited's Growth

Shenzhen Expressway Corporation Limited has reduced its earnings per share by 3.9% a year over the last three years. Revenue was pretty flat on last year.

Few shareholders would be pleased to read that EPS have declined. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Shenzhen Expressway Corporation Limited Been A Good Investment?

Shenzhen Expressway Corporation Limited has generated a total shareholder return of 22% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Shenzhen Expressway pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

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. In our study, we found 2 warning signs for Shenzhen Expressway you should be aware of, and 1 of them is concerning.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com