Key Insights

• Bonny International Holding to hold its Annual General Meeting on 30th of May
• Total pay for CEO Guojun Jin includes CN¥661.0k salary
• The total compensation is 59% less than the average for the industry
• Over the past three years, Bonny International Holding's EPS fell by 94% and over the past three years, the total shareholder return was 7.4%

Shareholders may be wondering what CEO Guojun Jin plans to do to improve the less than great performance at Bonny International Holding Limited (HKG:1906) recently. At the next AGM coming up on 30th of May, they can influence managerial decision making through voting on resolutions, including executive remuneration. 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 Guojun Jin Compare With Other Companies In The Industry?

According to our data, Bonny International Holding Limited has a market capitalization of HK$612m, and paid its CEO total annual compensation worth CN¥734k over the year to December 2023. We note that's an increase of 97% above last year. Notably, the salary which is CN¥661.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the Hong Kong Luxury industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.8m. In other words, Bonny International Holding pays its CEO lower than the industry median. Moreover, Guojun Jin also holds HK$324m worth of Bonny International Holding 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 94% of total compensation represents salary, while the remainder of 6% is other remuneration. Although there is a difference in how total compensation is set, Bonny International Holding more or less reflects the market in terms of setting the salary. 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 Bonny International Holding Limited's Growth Numbers

Bonny International Holding Limited has reduced its earnings per share by 94% a year over the last three years. It achieved revenue growth of 10% over the last year.

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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Bonny International Holding Limited Been A Good Investment?

Bonny International Holding Limited has not done too badly by shareholders, with a total return of 7.4%, over three years. It would be nice to see that metric improve in the future. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Bonny International Holding (of which 2 shouldn't be ignored!) 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.