Here's Why Shareholders May Want To Be Cautious With Increasing Xinda Investment Holdings Limited's (HKG:1281) CEO Pay Packet

Key Insights

• Xinda Investment Holdings to hold its Annual General Meeting on 23rd of May
• Total pay for CEO Qiang Wei includes CN¥1.80m salary
• The overall pay is 554% above the industry average
• Xinda Investment Holdings' three-year loss to shareholders was 20% while its EPS grew by 74% over the past three years

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In the past three years, the share price of Xinda Investment Holdings Limited (HKG:1281) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 23rd of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Xinda Investment Holdings

How Does Total Compensation For Qiang Wei Compare With Other Companies In The Industry?

Our data indicates that Xinda Investment Holdings Limited has a market capitalization of HK$166m, and total annual CEO compensation was reported as CN¥1.8m for the year to December 2024. This means that the compensation hasn't changed much from last year. Notably, the salary which is CN¥1.80m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Renewable Energy industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥278k. Accordingly, our analysis reveals that Xinda Investment Holdings Limited pays Qiang Wei north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	CN¥1.8m	CN¥1.8m	99%
Other	CN¥16k	CN¥16k	1%
Total Compensation	CN¥1.8m	CN¥1.8m	100%

Speaking on an industry level, nearly 46% of total compensation represents salary, while the remainder of 54% is other remuneration. Xinda Investment Holdings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Xinda Investment Holdings Limited's Growth

Over the past three years, Xinda Investment Holdings Limited has seen its earnings per share (EPS) grow by 74% per year. Revenue was pretty flat on last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Xinda Investment Holdings Limited Been A Good Investment?

Since shareholders would have lost about 20% over three years, some Xinda Investment Holdings Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Qiang receives almost all of their compensation through a salary. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Xinda Investment Holdings that investors should be aware of in a dynamic business environment.

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.