Key Insights
- China Oriental Group will host its Annual General Meeting on 28th of June
- Salary of CN¥10.4m is part of CEO Jingyuan Han's total remuneration
- Total compensation is 768% above industry average
- China Oriental Group's EPS declined by 65% over the past three years while total shareholder loss over the past three years was 50%
China Oriental Group Company Limited (HKG:581) has not performed well recently and CEO Jingyuan Han will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 28th of June. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.
View our latest analysis for China Oriental Group
How Does Total Compensation For Jingyuan Han Compare With Other Companies In The Industry?
Our data indicates that China Oriental Group Company Limited has a market capitalization of HK$4.1b, and total annual CEO compensation was reported as CN¥11m for the year to December 2023. That's a notable increase of 8.8% on last year. Notably, the salary which is CN¥10.4m, represents most of the total compensation being paid.
For comparison, other companies in the Hong Kong Metals and Mining industry with market capitalizations ranging between HK$1.6b and HK$6.2b had a median total CEO compensation of CN¥1.3m. This suggests that Jingyuan Han is paid more than the median for the industry. Furthermore, Jingyuan Han directly owns HK$97m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2023 | 2022 | Proportion (2023) |
| Salary | CN¥10m | CN¥9.9m | 92% |
| Other | CN¥914k | CN¥513k | 8% |
| Total Compensation | CN¥11m | CN¥10m | 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. Although there is a difference in how total compensation is set, China Oriental Group 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.
China Oriental Group Company Limited's Growth
China Oriental Group Company Limited has reduced its earnings per share by 65% a year over the last three years. It saw its revenue drop 4.9% over the last year.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 China Oriental Group Company Limited Been A Good Investment?
Few China Oriental Group Company Limited shareholders would feel satisfied with the return of -50% over three years. 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.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for China Oriental Group that investors should think about before committing capital to this stock.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com