Key Insights

• Besunyen Holdings will host its Annual General Meeting on 10th of May
• Salary of CN¥1.93m is part of CEO Yihong Zhao's total remuneration
• The total compensation is 118% higher than the average for the industry
• Over the past three years, Besunyen Holdings' EPS fell by 38% and over the past three years, the total loss to shareholders 65%

The results at Besunyen Holdings Company Limited (HKG:926) have been quite disappointing recently and CEO Yihong Zhao bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 10th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Comparing Besunyen Holdings Company Limited's CEO Compensation With The Industry

Our data indicates that Besunyen Holdings Company Limited has a market capitalization of HK$337m, and total annual CEO compensation was reported as CN¥2.5m for the year to December 2023. This means that the compensation hasn't changed much from last year. In particular, the salary of CN¥1.93m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Food industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.2m. Accordingly, our analysis reveals that Besunyen Holdings Company Limited pays Yihong Zhao north of the industry median. What's more, Yihong Zhao holds HK$173m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. Our data reveals that Besunyen Holdings allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Besunyen Holdings Company Limited's Growth

Besunyen Holdings Company Limited has reduced its earnings per share by 38% a year over the last three years. Its revenue is down 32% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Besunyen Holdings Company Limited Been A Good Investment?

Few Besunyen Holdings Company Limited shareholders would feel satisfied with the return of -65% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which is a bit unpleasant) in Besunyen Holdings 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.