Key Insights

• Minsheng Education Group's Annual General Meeting to take place on 12th of June
• Total pay for CEO Weiping Zhang includes CN¥7.34m salary
• Total compensation is 361% above industry average
• Minsheng Education Group's three-year loss to shareholders was 76% while its EPS grew by 1.2% over the past three years

In the past three years, the share price of Minsheng Education Group Company Limited (HKG:1569) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 12th of June. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Comparing Minsheng Education Group Company Limited's CEO Compensation With The Industry

Our data indicates that Minsheng Education Group Company Limited has a market capitalization of HK$1.1b, and total annual CEO compensation was reported as CN¥7.6m for the year to December 2023. Notably, that's a decrease of 9.1% over the year before. Notably, the salary which is CN¥7.34m, represents most of the total compensation being paid.

On comparing similar-sized companies in the Hong Kong Consumer Services industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.6m. This suggests that Weiping Zhang is paid more than the median for the industry.

On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. Investors will find it interesting that Minsheng Education Group pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Minsheng Education Group Company Limited's Growth

Minsheng Education Group Company Limited's earnings per share (EPS) grew 1.2% per year over the last three years. In the last year, its revenue changed by just 0.07%.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Minsheng Education Group Company Limited Been A Good Investment?

With a total shareholder return of -76% over three years, Minsheng Education Group Company Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Weiping receives almost all of their compensation through a salary. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Minsheng Education Group that you should be aware of before investing.

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.