Key Insights

• Mingfa Group (International) to hold its Annual General Meeting on 7th of June
• Salary of CN¥1.62m is part of CEO Xiaoming Zhong's total remuneration
• The overall pay is 49% below the industry average
• Mingfa Group (International)'s three-year loss to shareholders was 53% while its EPS was down 81% over the past three years

The underwhelming performance at Mingfa Group (International) Company Limited (HKG:846) recently has probably not pleased shareholders. The next AGM coming up on 7th of June will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. From our analysis below, we think CEO compensation looks appropriate for now.

How Does Total Compensation For Xiaoming Zhong Compare With Other Companies In The Industry?

Our data indicates that Mingfa Group (International) Company Limited has a market capitalization of HK$1.8b, and total annual CEO compensation was reported as CN¥1.6m for the year to December 2023. That's a fairly small increase of 4.4% over the previous year. Notably, the salary of CN¥1.6m is the entirety of the CEO compensation.

For comparison, other companies in the Hong Kong Real Estate industry with market capitalizations ranging between HK$782m and HK$3.1b had a median total CEO compensation of CN¥3.2m. In other words, Mingfa Group (International) pays its CEO lower than the industry median.

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. At the company level, Mingfa Group (International) pays Xiaoming Zhong solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Mingfa Group (International) Company Limited's Growth Numbers

Over the last three years, Mingfa Group (International) Company Limited has shrunk its earnings per share by 81% per year. Its revenue is down 9.9% over the previous year.

Overall this is not a very positive result for shareholders. 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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Mingfa Group (International) Company Limited Been A Good Investment?

Few Mingfa Group (International) Company Limited shareholders would feel satisfied with the return of -53% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Mingfa Group (International) pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Mingfa Group (International) that investors should be aware of in a dynamic business environment.

Important note: Mingfa Group (International) 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.