Key Insights

• China Aluminum Cans Holdings will host its Annual General Meeting on 27th of May
• CEO Wan Tsang Lin's total compensation includes salary of HK$346.0k
• The overall pay is comparable to the industry average
• China Aluminum Cans Holdings' total shareholder return over the past three years was 37% while its EPS was down 2.1% over the past three years

The share price of China Aluminum Cans Holdings Limited (HKG:6898) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 27th of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Comparing China Aluminum Cans Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that China Aluminum Cans Holdings Limited has a market capitalization of HK$542m, and reported total annual CEO compensation of HK$1.7m for the year to December 2023. That's a slight decrease of 6.0% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$346k.

For comparison, other companies in the Hong Kong Packaging industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.4m. So it looks like China Aluminum Cans Holdings compensates Wan Tsang Lin in line with the median for the industry. Moreover, Wan Tsang Lin also holds HK$354m worth of China Aluminum Cans Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. It's interesting to note that China Aluminum Cans Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at China Aluminum Cans Holdings Limited's Growth Numbers

Over the last three years, China Aluminum Cans Holdings Limited has shrunk its earnings per share by 2.1% per year. Its revenue is up 12% over the last year.

A lack of EPS improvement is not good to see. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has China Aluminum Cans Holdings Limited Been A Good Investment?

We think that the total shareholder return of 37%, over three years, would leave most China Aluminum Cans Holdings Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may 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. In our study, we found 3 warning signs for China Aluminum Cans Holdings you should be aware of, and 1 of them is potentially serious.

Switching gears from China Aluminum Cans 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.

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