Key Insights

• United Strength Power Holdings will host its Annual General Meeting on 19th of June
• Salary of CN¥1.32m is part of CEO Jinmin Zhao's total remuneration
• Total compensation is 41% below industry average
• United Strength Power Holdings' three-year loss to shareholders was 72% while its EPS was down 33% over the past three years

Performance at United Strength Power Holdings Limited (HKG:2337) has been rather uninspiring recently and shareholders may be wondering how CEO Jinmin Zhao plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 19th of June. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

How Does Total Compensation For Jinmin Zhao Compare With Other Companies In The Industry?

At the time of writing, our data shows that United Strength Power Holdings Limited has a market capitalization of HK$1.4b, and reported total annual CEO compensation of CN¥1.4m for the year to December 2023. That's a notable increase of 17% on last year. We note that the salary portion, which stands at CN¥1.32m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the Hong Kong Specialty Retail industry with market capitalizations between HK$781m and HK$3.1b, we discovered that the median CEO total compensation of that group was CN¥2.3m. This suggests that Jinmin Zhao is paid below the industry median. Moreover, Jinmin Zhao also holds HK$787m worth of United Strength Power 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 89% of total compensation represents salary, while the remainder of 11% is other remuneration. Investors will find it interesting that United Strength Power Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at United Strength Power Holdings Limited's Growth Numbers

United Strength Power Holdings Limited has reduced its earnings per share by 33% a year over the last three years. Its revenue is up 21% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has United Strength Power Holdings Limited Been A Good Investment?

The return of -72% over three years would not have pleased United Strength Power Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Jinmin receives almost all of their compensation through a salary. The loss to shareholders over the past three years is certainly concerning. The poor performance of the share price might have something to do with the lack of earnings growth. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

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've identified 2 warning signs for United Strength Power Holdings that investors should be aware of in a dynamic business environment.

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.