Key Insights

• China Demeter Financial Investments to hold its Annual General Meeting on 19th of June
• Total pay for CEO Ting Ho Ng includes HK$2.68m salary
• The total compensation is 32% higher than the average for the industry
• China Demeter Financial Investments' three-year loss to shareholders was 55% while its EPS grew by 44% over the past three years

In the past three years, the share price of China Demeter Financial Investments Limited (HKG:8120) has struggled to grow and now shareholders are sitting on a loss. 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 19th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Comparing China Demeter Financial Investments Limited's CEO Compensation With The Industry

Our data indicates that China Demeter Financial Investments Limited has a market capitalization of HK$52m, and total annual CEO compensation was reported as HK$2.7m for the year to December 2023. That's a notable decrease of 22% on last year. We note that the salary portion, which stands at HK$2.68m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Hong Kong Hospitality industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.1m. This suggests that Ting Ho Ng is paid more than the median for the industry. What's more, Ting Ho Ng holds HK$14m 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 86% of total compensation represents salary and 14% is other remuneration. China Demeter Financial Investments has gone down a largely traditional route, paying Ting Ho Ng a high salary, giving it preference over non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

China Demeter Financial Investments Limited's Growth

China Demeter Financial Investments Limited's earnings per share (EPS) grew 44% per year over the last three years. It achieved revenue growth of 11% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Demeter Financial Investments Limited Been A Good Investment?

The return of -55% over three years would not have pleased China Demeter Financial Investments Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Ting Ho receives almost all of their compensation through a salary. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. 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. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with 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. That's why we did our research, and identified 3 warning signs for China Demeter Financial Investments (of which 2 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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.