Here's Why Shareholders Should Examine Tianjin Binhai Teda Logistics (Group) Corporation Limited's (HKG:8348) CEO Compensation Package More Closely

Shareholders will probably not be too impressed with the underwhelming results at Tianjin Binhai Teda Logistics (Group) Corporation Limited (HKG:8348) recently. At the upcoming AGM on 11 May 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. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Tianjin Binhai Teda Logistics (Group)

How Does Total Compensation For Weihong Yang Compare With Other Companies In The Industry?

According to our data, Tianjin Binhai Teda Logistics (Group) Corporation Limited has a market capitalization of HK$128m, and paid its CEO total annual compensation worth CN¥851k over the year to December 2020. That's a fairly small increase of 3.0% over the previous year. It is worth noting that the CEO compensation consists entirely of the salary, worth CN¥851k.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥984k. So it looks like Tianjin Binhai Teda Logistics (Group) compensates Weihong Yang in line with the median for the industry.

Component	2020	2019	Proportion (2020)
Salary	CN¥851k	CN¥826k	100%
Other	-	-	-
Total Compensation	CN¥851k	CN¥826k	100%

Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. On a company level, Tianjin Binhai Teda Logistics (Group) prefers to reward its CEO through a salary, opting not to pay Weihong Yang through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Tianjin Binhai Teda Logistics (Group) Corporation Limited's Growth Numbers

Over the last three years, Tianjin Binhai Teda Logistics (Group) Corporation Limited has shrunk its earnings per share by 113% per year. It achieved revenue growth of 6.2% over the last year.

The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Tianjin Binhai Teda Logistics (Group) Corporation Limited Been A Good Investment?

Few Tianjin Binhai Teda Logistics (Group) Corporation Limited shareholders would feel satisfied with the return of -64% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Tianjin Binhai Teda Logistics (Group) rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Tianjin Binhai Teda Logistics (Group) you should be aware of, and 1 of them is a bit concerning.

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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