Key Insights

• Chen Xing Development Holdings will host its Annual General Meeting on 30th of October
• Total pay for CEO Wukui Bai includes CN¥510.0k salary
• The overall pay is 68% below the industry average
• Over the past three years, Chen Xing Development Holdings' EPS fell by 124% and over the past three years, the total loss to shareholders 64%

The performance at Chen Xing Development Holdings Limited (HKG:2286) has been rather lacklustre of late and shareholders may be wondering what CEO Wukui Bai is planning to do about this. 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 30th of October. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

How Does Total Compensation For Wukui Bai Compare With Other Companies In The Industry?

Our data indicates that Chen Xing Development Holdings Limited has a market capitalization of HK$378m, and total annual CEO compensation was reported as CN¥547k for the year to December 2023. Notably, that's an increase of 18% over the year before. In particular, the salary of CN¥510.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Real Estate industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.7m. This suggests that Wukui Bai is paid below the industry median. What's more, Wukui Bai holds HK$41m 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, roughly 77% of total compensation represents salary and 23% is other remuneration. It's interesting to note that Chen Xing Development Holdings pays out a greater portion of remuneration through salary, compared to the 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.

A Look at Chen Xing Development Holdings Limited's Growth Numbers

Over the last three years, Chen Xing Development Holdings Limited has shrunk its earnings per share by 124% per year. In the last year, its revenue is up 22%.

The decrease in EPS could be a concern for some investors. 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. 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 Chen Xing Development Holdings Limited Been A Good Investment?

Few Chen Xing Development Holdings Limited shareholders would feel satisfied with the return of -64% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The loss to shareholders over the past three years is certainly concerning. 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 will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for Chen Xing Development Holdings (of which 3 are potentially serious!) that you should know about in order to have a holistic understanding of the stock.

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.