Shareholders Will Probably Hold Off On Increasing China City Infrastructure Group Limited's (HKG:2349) CEO Compensation For The Time Being

Key Insights

• China City Infrastructure Group's Annual General Meeting to take place on 5th of June
• Salary of HK$3.60m is part of CEO Chao Bo Li's total remuneration
• The overall pay is 139% above the industry average
• Over the past three years, China City Infrastructure Group's EPS grew by 19% and over the past three years, the total loss to shareholders 49%

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The underwhelming share price performance of China City Infrastructure Group Limited (HKG:2349) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 5th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for China City Infrastructure Group

How Does Total Compensation For Chao Bo Li Compare With Other Companies In The Industry?

According to our data, China City Infrastructure Group Limited has a market capitalization of HK$175m, and paid its CEO total annual compensation worth HK$3.9m over the year to December 2024. We note that's a decrease of 13% compared to last year. In particular, the salary of HK$3.60m, 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 HK$1.6m. This suggests that Chao Bo Li is paid more than the median for the industry. Moreover, Chao Bo Li also holds HK$41m worth of China City Infrastructure Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 82% of total compensation represents salary, while the remainder of 18% is other remuneration. It's interesting to note that China City Infrastructure Group pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at China City Infrastructure Group Limited's Growth Numbers

Over the past three years, China City Infrastructure Group Limited has seen its earnings per share (EPS) grow by 19% per year. Its revenue is down 6.5% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has China City Infrastructure Group Limited Been A Good Investment?

With a total shareholder return of -49% over three years, China City Infrastructure Group Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for China City Infrastructure Group (1 is a bit concerning!) that you should be aware of before investing here.

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.