We Think Tianjin Jinran Public Utilities Company Limited's (HKG:1265) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Tianjin Jinran Public Utilities' Annual General Meeting to take place on 27th of June
• Total pay for CEO Liangchuan Sun includes CN¥262.8k salary
• Total compensation is similar to the industry average
• Tianjin Jinran Public Utilities' three-year loss to shareholders was 54% while its EPS was down 57% over the past three years

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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 will be interested in what the board will have to say about turning performance around at the next AGM on 27th of June. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Tianjin Jinran Public Utilities

How Does Total Compensation For Liangchuan Sun Compare With Other Companies In The Industry?

At the time of writing, our data shows that Tianjin Jinran Public Utilities Company Limited has a market capitalization of HK$357m, and reported total annual CEO compensation of CN¥606k for the year to December 2024. We note that's an increase of 17% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥263k.

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¥687k. So it looks like Tianjin Jinran Public Utilities compensates Liangchuan Sun in line with the median for the industry.

Speaking on an industry level, nearly 63% of total compensation represents salary, while the remainder of 37% is other remuneration. Tianjin Jinran Public Utilities sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company 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 57% per year. In the last year, its revenue is down 10%.

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. 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 -54% over three years, Tianjin Jinran Public Utilities Company Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Tianjin Jinran Public Utilities (1 can't be ignored!) that you should be aware of before investing here.

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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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.