Key Insights
- Quanzhou Huixin Micro-credit's Annual General Meeting to take place on 7th of June
- Total pay for CEO Zhijiang Yan includes CN¥609.6k salary
- Total compensation is similar to the industry average
- Quanzhou Huixin Micro-credit's EPS grew by 16% over the past three years while total shareholder loss over the past three years was 21%
Shareholders of Quanzhou Huixin Micro-credit Co., Ltd. (HKG:1577) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 7th of June. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
View our latest analysis for Quanzhou Huixin Micro-credit
How Does Total Compensation For Zhijiang Yan Compare With Other Companies In The Industry?
According to our data, Quanzhou Huixin Micro-credit Co., Ltd. has a market capitalization of HK$476m, and paid its CEO total annual compensation worth CN¥681k over the year to December 2023. That's a modest increase of 3.4% on the prior year. Notably, the salary which is CN¥609.6k, represents most of the total compensation being paid.
On comparing similar-sized companies in the Hong Kong Consumer Finance industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥748k. So it looks like Quanzhou Huixin Micro-credit compensates Zhijiang Yan in line with the median for the industry.
| Component | 2023 | 2022 | Proportion (2023) |
| Salary | CN¥610k | CN¥586k | 90% |
| Other | CN¥71k | CN¥72k | 10% |
| Total Compensation | CN¥681k | CN¥658k | 100% |
Speaking on an industry level, nearly 78% of total compensation represents salary, while the remainder of 22% is other remuneration. It's interesting to note that Quanzhou Huixin Micro-credit 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.
Quanzhou Huixin Micro-credit Co., Ltd.'s Growth
Quanzhou Huixin Micro-credit Co., Ltd.'s earnings per share (EPS) grew 16% per year over the last three years. It saw its revenue drop 11% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Quanzhou Huixin Micro-credit Co., Ltd. Been A Good Investment?
Since shareholders would have lost about 21% over three years, some Quanzhou Huixin Micro-credit Co., Ltd. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for Quanzhou Huixin Micro-credit you should be aware of, and 1 of them is a bit unpleasant.
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.