Key Insights

• Modern Land (China) will host its Annual General Meeting on 29th of November
• CEO Peng Zhang's total compensation includes salary of CN¥1.19m
• Total compensation is similar to the industry average
• Modern Land (China)'s three-year loss to shareholders was 95% while its EPS was down 96% over the past three years

The underwhelming share price performance of Modern Land (China) Co., Limited (HKG:1107) in the past three years would have disappointed many shareholders. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. The AGM coming up on 29th of November will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

See our latest analysis for Modern Land (China)

Comparing Modern Land (China) Co., Limited's CEO Compensation With The Industry

Our data indicates that Modern Land (China) Co., Limited has a market capitalization of HK$145m, and total annual CEO compensation was reported as CN¥1.6m for the year to December 2022. That's a notable decrease of 54% on last year. Notably, the salary which is CN¥1.19m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Real Estate industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.8m. From this we gather that Peng Zhang is paid around the median for CEOs in the industry. Furthermore, Peng Zhang directly owns HK$739k worth of shares in the company, implying that they are deeply invested in the company's success.

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. There isn't a significant difference between Modern Land (China) and the broader market, in terms of salary allocation in the overall compensation package. 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 Modern Land (China) Co., Limited's Growth Numbers

Modern Land (China) Co., Limited has reduced its earnings per share by 96% a year over the last three years. It achieved revenue growth of 51% over the last year.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Modern Land (China) Co., Limited Been A Good Investment?

Few Modern Land (China) Co., Limited shareholders would feel satisfied with the return of -95% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. The upcoming AGM will provide shareholders the opportunity to revisit the company's remuneration policies and evaluate if the board's judgement and decision-making is aligned with that of the company's shareholders.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 5 warning signs for Modern Land (China) (3 shouldn't be ignored!) that you should be aware of before investing here.

Important note: Modern Land (China) 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.