Key Insights

• Yixin Group will host its Annual General Meeting on 8th of May
• Salary of CN¥3.67m is part of CEO Andy Zhang's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, Yixin Group's EPS grew by 116% and over the past three years, the total loss to shareholders 74%

The underwhelming share price performance of Yixin Group Limited (HKG:2858) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 8th of May. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Comparing Yixin Group Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Yixin Group Limited has a market capitalization of HK$4.4b, and reported total annual CEO compensation of CN¥3.8m for the year to December 2023. We note that's an increase of 30% above last year. Notably, the salary which is CN¥3.67m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Consumer Finance industry with market capitalizations ranging between HK$1.6b and HK$6.3b had a median total CEO compensation of CN¥3.8m. This suggests that Yixin Group remunerates its CEO largely in line with the industry average.

On an industry level, around 84% of total compensation represents salary and 16% is other remuneration. Yixin Group has gone down a largely traditional route, paying Andy Zhang a high salary, giving it preference over non-salary benefits. 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.

Yixin Group Limited's Growth

Yixin Group Limited has seen its earnings per share (EPS) increase by 116% a year over the past three years. Its revenue is up 36% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Yixin Group Limited Been A Good Investment?

The return of -74% over three years would not have pleased Yixin Group Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Andy receives almost all of their compensation through a salary. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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. That's why we did our research, and identified 3 warning signs for Yixin Group (of which 2 are a bit unpleasant!) that you should know about in order to have a holistic understanding of the 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.