Key Insights

• Shenzhou International Group Holdings will host its Annual General Meeting on 28th of May
• Salary of CN¥4.38m is part of CEO Guanlin Huang's total remuneration
• Total compensation is similar to the industry average
• Shenzhou International Group Holdings' EPS declined by 3.7% over the past three years while total shareholder loss over the past three years was 58%

Shenzhou International Group Holdings Limited (HKG:2313) has not performed well recently and CEO Guanlin Huang will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 28th of May. 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 Shenzhou International Group Holdings Limited's CEO Compensation With The Industry

Our data indicates that Shenzhou International Group Holdings Limited has a market capitalization of HK$121b, and total annual CEO compensation was reported as CN¥4.4m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is CN¥4.38m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Luxury industry with market capitalizations above HK$62b, reported a median total CEO compensation of CN¥5.1m. This suggests that Shenzhou International Group Holdings remunerates its CEO largely in line with the industry average.

Talking in terms of the industry, salary represented approximately 94% of total compensation out of all the companies we analyzed, while other remuneration made up 6% of the pie. Investors will find it interesting that Shenzhou International Group Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Shenzhou International Group Holdings Limited's Growth Numbers

Over the last three years, Shenzhou International Group Holdings Limited has shrunk its earnings per share by 3.7% per year. Its revenue is down 10% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Shenzhou International Group Holdings Limited Been A Good Investment?

With a total shareholder return of -58% over three years, Shenzhou International Group Holdings Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Guanlin receives almost all of their compensation through a salary. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. 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.

Whatever your view on compensation, you might want to check if insiders are buying or selling Shenzhou International Group Holdings shares (free trial).

Important note: Shenzhou International Group 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.

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.