Key Insights

• Huisen Shares Group will host its Annual General Meeting on 31st of May
• Total pay for CEO Runlu Wu includes CN¥840.0k salary
• Total compensation is 61% below industry average
• Over the past three years, Huisen Shares Group's EPS fell by 38% and over the past three years, the total loss to shareholders 92%

Performance at Huisen Shares Group Limited (HKG:2127) has been rather uninspiring recently and shareholders may be wondering how CEO Runlu Wu plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 31st of May. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

How Does Total Compensation For Runlu Wu Compare With Other Companies In The Industry?

At the time of writing, our data shows that Huisen Shares Group Limited has a market capitalization of HK$597m, and reported total annual CEO compensation of CN¥852k for the year to December 2023. This was the same amount the CEO received in the prior year. Notably, the salary which is CN¥840.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the Hong Kong Consumer Durables industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥2.2m. Accordingly, Huisen Shares Group pays its CEO under the industry median.

Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. Huisen Shares Group is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to 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.

Huisen Shares Group Limited's Growth

Over the last three years, Huisen Shares Group Limited has shrunk its earnings per share by 38% per year. Its revenue is up 21% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Huisen Shares Group Limited Been A Good Investment?

The return of -92% over three years would not have pleased Huisen Shares Group Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Runlu receives almost all of their compensation through a salary. The fact that shareholders have earned a negative share price return is certainly disconcerting. The fact that earnings growth has gone backwards could be a factor for the downward trend in the share price. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

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. In our study, we found 5 warning signs for Huisen Shares Group you should be aware of, and 2 of them are a bit concerning.

Switching gears from Huisen Shares Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.