Key Insights

• Greentown Service Group to hold its Annual General Meeting on 21st of June
• Total pay for CEO Keli Jin includes CN¥1.67m salary
• Total compensation is 34% below industry average
• Greentown Service Group's EPS declined by 6.4% over the past three years while total shareholder loss over the past three years was 67%

Performance at Greentown Service Group Co. Ltd. (HKG:2869) has been rather uninspiring recently and shareholders may be wondering how CEO Keli Jin 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 21st of June. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

Comparing Greentown Service Group Co. Ltd.'s CEO Compensation With The Industry

At the time of writing, our data shows that Greentown Service Group Co. Ltd. has a market capitalization of HK$12b, and reported total annual CEO compensation of CN¥2.9m for the year to December 2023. That's a notable decrease of 28% on last year. Notably, the salary which is CN¥1.67m, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the Hong Kong Real Estate industry with market capitalizations ranging from HK$7.8b to HK$25b, the reported median CEO total compensation was CN¥4.4m. This suggests that Keli Jin is paid below the industry median. Moreover, Keli Jin also holds HK$16m worth of Greentown Service Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

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. It's interesting to note that Greentown Service Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Greentown Service Group Co. Ltd.'s Growth

Over the last three years, Greentown Service Group Co. Ltd. has shrunk its earnings per share by 6.4% per year. Its revenue is up 17% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Greentown Service Group Co. Ltd. Been A Good Investment?

The return of -67% over three years would not have pleased Greentown Service Group Co. Ltd. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss is certainly disheartening. The downward trend in share price performance may be attributable to the the fact that earnings growth has gone backwards. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Greentown Service Group 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.

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