Key Insights
- Capinfo to hold its Annual General Meeting on 18th of June
- Salary of CN¥1.16m is part of CEO Yiqian Zhang's total remuneration
- Total compensation is similar to the industry average
- Capinfo's EPS declined by 34% over the past three years while total shareholder loss over the past three years was 30%
The results at Capinfo Company Limited (HKG:1075) have been quite disappointing recently and CEO Yiqian Zhang bears some responsibility for this. At the upcoming AGM on 18th of June, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.
Check out our latest analysis for Capinfo
How Does Total Compensation For Yiqian Zhang Compare With Other Companies In The Industry?
At the time of writing, our data shows that Capinfo Company Limited has a market capitalization of HK$725m, and reported total annual CEO compensation of CN¥1.3m for the year to December 2023. That's a notable decrease of 14% on last year. In particular, the salary of CN¥1.16m, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the Hong Kong IT industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.1m. So it looks like Capinfo compensates Yiqian Zhang in line with the median for the industry.
| Component | 2023 | 2022 | Proportion (2023) |
| Salary | CN¥1.2m | CN¥1.4m | 93% |
| Other | CN¥91k | CN¥72k | 7% |
| Total Compensation | CN¥1.3m | CN¥1.5m | 100% |
On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. Although there is a difference in how total compensation is set, Capinfo more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Capinfo Company Limited's Growth Numbers
Over the last three years, Capinfo Company Limited has shrunk its earnings per share by 34% per year. In the last year, its revenue changed by just 0.2%.
Overall this is not a very positive result for shareholders. And the flat revenue is seriously uninspiring. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Capinfo Company Limited Been A Good Investment?
With a total shareholder return of -30% over three years, Capinfo Company Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
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 did our research and identified 2 warning signs (and 1 which is concerning) in Capinfo we think you should know about.
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.