Key Insights

• Jingrui Holdings will host its Annual General Meeting on 18th of June
• Salary of CN¥1.32m is part of CEO Hao Yan's total remuneration
• Total compensation is similar to the industry average
• Jingrui Holdings' three-year loss to shareholders was 96% while its EPS was down 89% over the past three years

Jingrui Holdings Limited (HKG:1862) has not performed well recently and CEO Hao Yan will probably need to up their game. At the upcoming AGM on 18th of June, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

Comparing Jingrui Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Jingrui Holdings Limited has a market capitalization of HK$145m, and reported total annual CEO compensation of CN¥1.4m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at CN¥1.32m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Hong Kong Real Estate industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.7m. From this we gather that Hao Yan is paid around the median for CEOs in the industry. What's more, Hao Yan holds HK$58m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. According to our research, Jingrui Holdings has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Jingrui Holdings Limited's Growth

Jingrui Holdings Limited has reduced its earnings per share by 89% a year over the last three years. In the last year, its revenue is down 7.8%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Jingrui Holdings Limited Been A Good Investment?

Few Jingrui Holdings Limited shareholders would feel satisfied with the return of -96% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Jingrui Holdings you should be aware of, and 2 of them are concerning.

Switching gears from Jingrui Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.