Key Insights

• Futian Holdings will host its Annual General Meeting on 10th of May
• Total pay for CEO Yang Xie includes CN¥462.0k salary
• The total compensation is similar to the average for the industry
• Over the past three years, Futian Holdings' EPS grew by 110% and over the past three years, the total shareholder return was 16%

Performance at Futian Holdings Limited (HKG:8196) has been reasonably good and CEO Yang Xie has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 10th of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

How Does Total Compensation For Yang Xie Compare With Other Companies In The Industry?

Our data indicates that Futian Holdings Limited has a market capitalization of HK$111m, and total annual CEO compensation was reported as CN¥1.5m for the year to December 2023. Notably, that's an increase of 13% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥462k.

For comparison, other companies in the Hong Kong Trade Distributors industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.9m. This suggests that Futian Holdings remunerates its CEO largely in line with the industry average. Furthermore, Yang Xie directly owns HK$34m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. In Futian Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Futian Holdings Limited's Growth

Futian Holdings Limited's earnings per share (EPS) grew 110% per year over the last three years. In the last year, its revenue is down 58%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. 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 Futian Holdings Limited Been A Good Investment?

Futian Holdings Limited has served shareholders reasonably well, with a total return of 16% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Futian Holdings that investors should look into moving forward.

Important note: Futian Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.