Key Insights

• Labixiaoxin Snacks Group's Annual General Meeting to take place on 18th of June
• CEO Yu Shuang Zheng's total compensation includes salary of CN¥800.0k
• The overall pay is 35% below the industry average
• Labixiaoxin Snacks Group's EPS declined by 61% over the past three years while total shareholder loss over the past three years was 63%

The underwhelming performance at Labixiaoxin Snacks Group Limited (HKG:1262) recently has probably not pleased shareholders. The next AGM coming up on 18th 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 Yu Shuang Zheng Compare With Other Companies In The Industry?

Our data indicates that Labixiaoxin Snacks Group Limited has a market capitalization of HK$157m, and total annual CEO compensation was reported as CN¥800k for the year to December 2023. There was no change in the compensation compared to last year. Notably, the salary of CN¥800k is the entirety of the CEO compensation.

In comparison with other companies in the Hong Kong Food industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.2m. That is to say, Yu Shuang Zheng is paid under the industry median.

Speaking on an industry level, nearly 74% of total compensation represents salary, while the remainder of 26% is other remuneration. At the company level, Labixiaoxin Snacks Group pays Yu Shuang Zheng 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.

Labixiaoxin Snacks Group Limited's Growth

Labixiaoxin Snacks Group Limited has reduced its earnings per share by 61% a year over the last three years. In the last year, its revenue is up 12%.

Overall this is not a very positive result for shareholders. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards 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 Labixiaoxin Snacks Group Limited Been A Good Investment?

The return of -63% over three years would not have pleased Labixiaoxin Snacks Group Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Labixiaoxin Snacks Group pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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.

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. That's why we did some digging and identified 1 warning sign for Labixiaoxin Snacks Group that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.