Key Insights

• South Manganese Investment will host its Annual General Meeting on 21st of June
• Salary of HK$7.18m is part of CEO Weijian Li's total remuneration
• The overall pay is 1,831% above the industry average
• South Manganese Investment's EPS grew by 49% over the past three years while total shareholder loss over the past three years was 18%

Shareholders of South Manganese Investment Limited (HKG:1091) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 21st of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

How Does Total Compensation For Weijian Li Compare With Other Companies In The Industry?

Our data indicates that South Manganese Investment Limited has a market capitalization of HK$1.4b, and total annual CEO compensation was reported as HK$19m for the year to December 2023. We note that's an increase of 25% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$7.2m.

In comparison with other companies in the Hong Kong Metals and Mining industry with market capitalizations ranging from HK$781m to HK$3.1b, the reported median CEO total compensation was HK$970k. Accordingly, our analysis reveals that South Manganese Investment Limited pays Weijian Li north of the industry median.

On an industry level, roughly 86% of total compensation represents salary and 14% is other remuneration. South Manganese Investment pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

South Manganese Investment Limited's Growth

South Manganese Investment Limited's earnings per share (EPS) grew 49% per year over the last three years. It achieved revenue growth of 6.9% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has South Manganese Investment Limited Been A Good Investment?

Since shareholders would have lost about 18% over three years, some South Manganese Investment Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might 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. That's why we did our research, and identified 3 warning signs for South Manganese Investment (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.

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