Xinyi Energy Holdings Limited's (HKG:3868) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Xinyi Energy Holdings' Annual General Meeting to take place on 31st of May
• Salary of HK$1.97m is part of CEO Fong Ngai Tung's total remuneration
• The overall pay is 267% above the industry average
• Xinyi Energy Holdings' EPS declined by 3.6% over the past three years while total shareholder loss over the past three years was 65%

Shareholders will probably not be too impressed with the underwhelming results at Xinyi Energy Holdings Limited (HKG:3868) recently. At the upcoming AGM on 31st of May, shareholders can hear from the board including their plans for turning around performance. 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 Xinyi Energy Holdings

How Does Total Compensation For Fong Ngai Tung Compare With Other Companies In The Industry?

According to our data, Xinyi Energy Holdings Limited has a market capitalization of HK$9.5b, and paid its CEO total annual compensation worth HK$3.2m over the year to December 2023. That's a notable decrease of 34% on last year. We note that the salary portion, which stands at HK$1.97m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the Hong Kong Renewable Energy industry with market capitalizations between HK$7.8b and HK$25b, we discovered that the median CEO total compensation of that group was HK$882k. Hence, we can conclude that Fong Ngai Tung is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	HK$2.0m	HK$1.7m	61%
Other	HK$1.3m	HK$3.2m	39%
Total Compensation	HK$3.2m	HK$4.9m	100%

On an industry level, around 52% of total compensation represents salary and 48% is other remuneration. It's interesting to note that Xinyi Energy Holdings pays out a greater portion of remuneration through salary, compared to the 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.

Xinyi Energy Holdings Limited's Growth

Xinyi Energy Holdings Limited has reduced its earnings per share by 3.6% a year over the last three years. Its revenue is up 8.7% 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Xinyi Energy Holdings Limited Been A Good Investment?

The return of -65% over three years would not have pleased Xinyi Energy Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too 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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Xinyi Energy Holdings (1 is concerning!) that you should be aware of before investing here.

Important note: Xinyi Energy Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.