Shareholders May Be Wary Of Increasing Tianjin Jinran Public Utilities Company Limited's (HKG:1265) CEO Compensation Package

Key Insights

• Tianjin Jinran Public Utilities will host its Annual General Meeting on 27th of June
• CEO Liangchuan Sun's total compensation includes salary of CN¥282.2k
• The overall pay is comparable to the industry average
• Tianjin Jinran Public Utilities' EPS declined by 93% over the past three years while total shareholder loss over the past three years was 59%

Tianjin Jinran Public Utilities Company Limited (HKG:1265) has not performed well recently and CEO Liangchuan Sun will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 27th of June. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Tianjin Jinran Public Utilities

Comparing Tianjin Jinran Public Utilities Company Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Tianjin Jinran Public Utilities Company Limited has a market capitalization of HK$372m, and reported total annual CEO compensation of CN¥516k for the year to December 2023. That's a notable decrease of 8.9% on last year. We note that the salary of CN¥282.2k makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the Hong Kong Gas Utilities industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥577k. So it looks like Tianjin Jinran Public Utilities compensates Liangchuan Sun in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	CN¥282k	CN¥283k	55%
Other	CN¥234k	CN¥284k	45%
Total Compensation	CN¥516k	CN¥567k	100%

Speaking on an industry level, nearly 67% of total compensation represents salary, while the remainder of 33% is other remuneration. Tianjin Jinran Public Utilities sets aside a smaller share of compensation for salary, in comparison to the overall 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.

Tianjin Jinran Public Utilities Company Limited's Growth

Over the last three years, Tianjin Jinran Public Utilities Company Limited has shrunk its earnings per share by 93% per year. Revenue was pretty flat on last year.

Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Jinran Public Utilities Company Limited Been A Good Investment?

With a total shareholder return of -59% over three years, Tianjin Jinran Public Utilities Company Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Tianjin Jinran Public Utilities (1 shouldn't be ignored!) that you should be aware of before investing here.

Switching gears from Tianjin Jinran Public Utilities, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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