Key Insights

• Shinelong Automotive Lightweight Application's Annual General Meeting to take place on 13th of June
• Total pay for CEO Wan-Yi Lin includes CN¥671.0k salary
• The overall pay is comparable to the industry average
• Over the past three years, Shinelong Automotive Lightweight Application's EPS fell by 10% and over the past three years, the total loss to shareholders 29%

The results at Shinelong Automotive Lightweight Application Limited (HKG:1930) have been quite disappointing recently and CEO Wan-Yi Lin bears some responsibility for this. At the upcoming AGM on 13th of June, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Comparing Shinelong Automotive Lightweight Application Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Shinelong Automotive Lightweight Application Limited has a market capitalization of HK$168m, and reported total annual CEO compensation of CN¥893k for the year to December 2023. We note that's a decrease of 8.3% compared to last year. In particular, the salary of CN¥671.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Auto Components industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥712k. So it looks like Shinelong Automotive Lightweight Application compensates Wan-Yi Lin in line with the median for the industry. Furthermore, Wan-Yi Lin directly owns HK$372k worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 83% of total compensation represents salary, while the remainder of 17% is other remuneration. Although there is a difference in how total compensation is set, Shinelong Automotive Lightweight Application more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Shinelong Automotive Lightweight Application Limited's Growth Numbers

Over the last three years, Shinelong Automotive Lightweight Application Limited has shrunk its earnings per share by 10% per year. In the last year, its revenue is up 10%.

Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Shinelong Automotive Lightweight Application Limited Been A Good Investment?

Given the total shareholder loss of 29% over three years, many shareholders in Shinelong Automotive Lightweight Application Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which is a bit concerning) in Shinelong Automotive Lightweight Application we think you should know about.

Important note: Shinelong Automotive Lightweight Application 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.