It Looks Like Jilin Province Chuncheng Heating Company Limited's (HKG:1853) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Jilin Province Chuncheng Heating will host its Annual General Meeting on 31st of May
• Total pay for CEO Zhongshi Yang includes CN¥500.8k salary
• Total compensation is similar to the industry average
• Over the past three years, Jilin Province Chuncheng Heating's EPS fell by 11% and over the past three years, the total loss to shareholders 9.4%

Jilin Province Chuncheng Heating Company Limited (HKG:1853) has not performed well recently and CEO Zhongshi Yang 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 31st of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Jilin Province Chuncheng Heating

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

At the time of writing, our data shows that Jilin Province Chuncheng Heating Company Limited has a market capitalization of HK$770m, and reported total annual CEO compensation of CN¥538k for the year to December 2023. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at CN¥500.8k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Hong Kong Water Utilities industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥567k. This suggests that Jilin Province Chuncheng Heating remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	CN¥501k	CN¥510k	93%
Other	CN¥38k	CN¥36k	7%
Total Compensation	CN¥538k	CN¥546k	100%

Talking in terms of the industry, salary represented approximately 86% of total compensation out of all the companies we analyzed, while other remuneration made up 14% of the pie. Our data reveals that Jilin Province Chuncheng Heating allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Jilin Province Chuncheng Heating Company Limited's Growth

Over the last three years, Jilin Province Chuncheng Heating Company Limited has shrunk its earnings per share by 11% per year. In the last year, its revenue is up 2.4%.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. 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 Jilin Province Chuncheng Heating Company Limited Been A Good Investment?

Given the total shareholder loss of 9.4% over three years, many shareholders in Jilin Province Chuncheng Heating Company Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Jilin Province Chuncheng Heating that you should be aware of before investing.

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.