Key Insights

• Yunhong Guixin Group Holdings will host its Annual General Meeting on 25th of June
• Salary of CN¥542.0k is part of CEO Yaping Zhang's total remuneration
• Total compensation is 65% below industry average
• Over the past three years, Yunhong Guixin Group Holdings' EPS fell by 78% and over the past three years, the total loss to shareholders 15%

The underwhelming performance at Yunhong Guixin Group Holdings Limited (HKG:8349) recently has probably not pleased shareholders. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 25th of June. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

How Does Total Compensation For Yaping Zhang Compare With Other Companies In The Industry?

According to our data, Yunhong Guixin Group Holdings Limited has a market capitalization of HK$272m, and paid its CEO total annual compensation worth CN¥558k over the year to December 2023. That's just a smallish increase of 5.7% on last year. Notably, the salary which is CN¥542.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the Hong Kong Chemicals industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.6m. This suggests that Yaping Zhang is paid below the industry median.

On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. Investors will find it interesting that Yunhong Guixin Group Holdings pays the bulk of its rewards through a traditional salary, instead of 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.

Yunhong Guixin Group Holdings Limited's Growth

Yunhong Guixin Group Holdings Limited has reduced its earnings per share by 78% a year over the last three years. It saw its revenue drop 24% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Yunhong Guixin Group Holdings Limited Been A Good Investment?

Given the total shareholder loss of 15% over three years, many shareholders in Yunhong Guixin Group Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Yaping receives almost all of their compensation through a salary. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Yunhong Guixin Group Holdings (1 can't be ignored!) that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com