Key Insights

• Qilu Expressway to hold its Annual General Meeting on 26th of June
• Total pay for CEO Hui Peng includes CN¥175.0k salary
• Total compensation is 75% above industry average
• Qilu Expressway's EPS declined by 5.4% over the past three years while total shareholder return over the past three years was 27%

CEO Hui Peng has done a decent job of delivering relatively good performance at Qilu Expressway Company Limited (HKG:1576) recently. As shareholders go into the upcoming AGM on 26th of June, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

How Does Total Compensation For Hui Peng Compare With Other Companies In The Industry?

Our data indicates that Qilu Expressway Company Limited has a market capitalization of HK$4.4b, and total annual CEO compensation was reported as CN¥1.5m for the year to December 2023. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥175k.

On examining similar-sized companies in the Hong Kong Infrastructure industry with market capitalizations between HK$1.6b and HK$6.2b, we discovered that the median CEO total compensation of that group was CN¥845k. Hence, we can conclude that Hui Peng is remunerated higher than the industry median.

Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. Qilu Expressway pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Qilu Expressway Company Limited's Growth

Over the last three years, Qilu Expressway Company Limited has shrunk its earnings per share by 5.4% per year. It achieved revenue growth of 91% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. 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 Qilu Expressway Company Limited Been A Good Investment?

With a total shareholder return of 27% over three years, Qilu Expressway Company Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

The overall company performance has been commendable, however there are still areas for improvement. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already paid higher than the industry.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 4 warning signs for Qilu Expressway (2 shouldn't be ignored!) that you should be aware of before investing here.

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