Key Insights

• Tsingtao Brewery will host its Annual General Meeting on 28th of June
• Total pay for CEO Zong Xiang Jiang includes CN¥632.4k salary
• Total compensation is 48% below industry average
• Tsingtao Brewery's three-year loss to shareholders was 36% while its EPS grew by 18% over the past three years

Shareholders may be wondering what CEO Zong Xiang Jiang plans to do to improve the less than great performance at Tsingtao Brewery Company Limited (HKG:168) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 28th of June. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Comparing Tsingtao Brewery Company Limited's CEO Compensation With The Industry

According to our data, Tsingtao Brewery Company Limited has a market capitalization of HK$90b, and paid its CEO total annual compensation worth CN¥1.6m over the year to December 2023. We note that's an increase of 79% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥632k.

On comparing similar companies in the Hong Kong Beverage industry with market capitalizations above HK$62b, we found that the median total CEO compensation was CN¥3.0m. In other words, Tsingtao Brewery pays its CEO lower than the industry median. Moreover, Zong Xiang Jiang also holds HK$5.3m worth of Tsingtao Brewery 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 74% of total compensation out of all the companies we analyzed, while other remuneration made up 26% of the pie. Tsingtao Brewery sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Tsingtao Brewery Company Limited's Growth

Over the past three years, Tsingtao Brewery Company Limited has seen its earnings per share (EPS) grow by 18% per year. Revenue was pretty flat on last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Tsingtao Brewery Company Limited Been A Good Investment?

Few Tsingtao Brewery Company Limited shareholders would feel satisfied with the return of -36% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The fact that shareholders have earned a negative share price return is certainly disconcerting. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Tsingtao Brewery (1 shouldn't be ignored!) that you should be aware of before investing here.

Switching gears from Tsingtao Brewery, 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.

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