Shareholders May Be Wary Of Increasing China Everbright Environment Group Limited's (HKG:257) CEO Compensation Package

Key Insights

• China Everbright Environment Group will host its Annual General Meeting on 29th of May
• Salary of HK$1.41m is part of CEO Zusheng Luan's total remuneration
• The overall pay is 211% above the industry average
• Over the past three years, China Everbright Environment Group's EPS fell by 21% and over the past three years, the total loss to shareholders 1.5%

The results at China Everbright Environment Group Limited (HKG:257) have been quite disappointing recently and CEO Zusheng Luan bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 29th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for China Everbright Environment Group

How Does Total Compensation For Zusheng Luan Compare With Other Companies In The Industry?

Our data indicates that China Everbright Environment Group Limited has a market capitalization of HK$23b, and total annual CEO compensation was reported as HK$4.2m for the year to December 2024. Notably, that's an increase of 50% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$1.4m.

For comparison, other companies in the Hong Kong Commercial Services industry with market capitalizations ranging between HK$16b and HK$50b had a median total CEO compensation of HK$1.3m. Hence, we can conclude that Zusheng Luan is remunerated higher than the industry median.

Talking in terms of the industry, salary represented approximately 83% of total compensation out of all the companies we analyzed, while other remuneration made up 17% of the pie. In China Everbright Environment Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at China Everbright Environment Group Limited's Growth Numbers

China Everbright Environment Group Limited has reduced its earnings per share by 21% a year over the last three years. In the last year, its revenue is down 5.7%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has China Everbright Environment Group Limited Been A Good Investment?

With a three year total loss of 1.5% for the shareholders, China Everbright Environment Group Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for China Everbright Environment Group you should be aware of, and 1 of them is potentially serious.

Switching gears from China Everbright Environment Group, 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.