Key Insights

• Hong Kong Resources Holdings will host its Annual General Meeting on 23rd of November
• Total pay for CEO Ning Li includes HK$1.44m salary
• Total compensation is similar to the industry average
• Hong Kong Resources Holdings' total shareholder return over the past three years was 91% while its EPS was down 12% over the past three years

Hong Kong Resources Holdings Company Limited (HKG:2882) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 23rd of November. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for Hong Kong Resources Holdings

Comparing Hong Kong Resources Holdings Company Limited's CEO Compensation With The Industry

According to our data, Hong Kong Resources Holdings Company Limited has a market capitalization of HK$181m, and paid its CEO total annual compensation worth HK$1.5m over the year to June 2023. There was no change in the compensation compared to last year. Notably, the salary which is HK$1.44m, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Specialty Retail industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.9m. From this we gather that Ning Li is paid around the median for CEOs in the industry.

Talking in terms of the industry, salary represented approximately 87% of total compensation out of all the companies we analyzed, while other remuneration made up 13% of the pie. Hong Kong Resources Holdings has gone down a largely traditional route, paying Ning Li a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Hong Kong Resources Holdings Company Limited's Growth Numbers

Over the last three years, Hong Kong Resources Holdings Company Limited has shrunk its earnings per share by 12% per year. In the last year, its revenue is down 11%.

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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Hong Kong Resources Holdings Company Limited Been A Good Investment?

We think that the total shareholder return of 91%, over three years, would leave most Hong Kong Resources Holdings Company Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Ning receives almost all of their compensation through a salary. Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in Hong Kong Resources Holdings we think you should know about.

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.