Key Insights

• Nanfang Communication Holdings will host its Annual General Meeting on 18th of June
• Salary of CN¥1.05m is part of CEO Ming Shi's total remuneration
• The total compensation is similar to the average for the industry
• Nanfang Communication Holdings' EPS grew by 73% over the past three years while total shareholder loss over the past three years was 73%

The underwhelming share price performance of Nanfang Communication Holdings Limited (HKG:1617) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 18th of June. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

How Does Total Compensation For Ming Shi Compare With Other Companies In The Industry?

According to our data, Nanfang Communication Holdings Limited has a market capitalization of HK$146m, and paid its CEO total annual compensation worth CN¥1.4m over the year to December 2023. That's mostly flat as compared to the prior year's compensation. In particular, the salary of CN¥1.05m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Communications industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.6m. From this we gather that Ming Shi is paid around the median for CEOs in the industry. What's more, Ming Shi holds HK$5.0m 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 77% of total compensation represents salary and 23% is other remuneration. Our data reveals that Nanfang Communication Holdings allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Nanfang Communication Holdings Limited's Growth

Over the past three years, Nanfang Communication Holdings Limited has seen its earnings per share (EPS) grow by 73% per year. Its revenue is down 18% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Nanfang Communication Holdings Limited Been A Good Investment?

Few Nanfang Communication Holdings Limited shareholders would feel satisfied with the return of -73% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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. We identified 3 warning signs for Nanfang Communication Holdings (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Switching gears from Nanfang Communication Holdings, 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.