Key Insights

• China Agri-Products Exchange's Annual General Meeting to take place on 20th of August
• Salary of HK$710.0k is part of CEO Raymond Leung's total remuneration
• The overall pay is 85% above the industry average
• China Agri-Products Exchange's three-year loss to shareholders was 72% while its EPS was down 75% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at China Agri-Products Exchange Limited (HKG:149) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 20th of August. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Comparing China Agri-Products Exchange Limited's CEO Compensation With The Industry

Our data indicates that China Agri-Products Exchange Limited has a market capitalization of HK$348m, and total annual CEO compensation was reported as HK$3.9m for the year to March 2024. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$710k.

In comparison with other companies in the Hong Kong Real Estate industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.1m. Hence, we can conclude that Raymond Leung is remunerated higher than the industry median.

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. In China Agri-Products Exchange's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

China Agri-Products Exchange Limited's Growth

Over the last three years, China Agri-Products Exchange Limited has shrunk its earnings per share by 75% per year. In the last year, its revenue is down 2.9%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 China Agri-Products Exchange Limited Been A Good Investment?

With a total shareholder return of -72% over three years, China Agri-Products Exchange Limited shareholders would by and large be disappointed. 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, the board will get the chance to explain the steps it plans to take to improve business 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 3 warning signs for China Agri-Products Exchange you should be aware of, and 1 of them doesn't sit too well with us.

Switching gears from China Agri-Products Exchange, 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.