Key Insights

• Virscend Education will host its Annual General Meeting on 26th of January
• Salary of CN¥898.0k is part of CEO Yude Yan's total remuneration
• The total compensation is 42% less than the average for the industry
• Over the past three years, Virscend Education's EPS fell by 53% and over the past three years, the total loss to shareholders 93%

The performance at Virscend Education Company Limited (HKG:1565) has been rather lacklustre of late and shareholders may be wondering what CEO Yude Yan is planning to do about this. At the next AGM coming up on 26th of January, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

See our latest analysis for Virscend Education

How Does Total Compensation For Yude Yan Compare With Other Companies In The Industry?

According to our data, Virscend Education Company Limited has a market capitalization of HK$432m, and paid its CEO total annual compensation worth CN¥898k over the year to August 2023. That's just a smallish increase of 7.8% on last year. Notably, the salary of CN¥898k is the entirety of the CEO compensation.

In comparison with other companies in the Hong Kong Consumer Services industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.6m. That is to say, Yude Yan is paid under the industry median. Furthermore, Yude Yan directly owns HK$211m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 82% of total compensation represents salary and 18% is other remuneration. Speaking on a company level, Virscend Education prefers to tread along a traditional path, disbursing all compensation through a salary. 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 Virscend Education Company Limited's Growth Numbers

Virscend Education Company Limited has reduced its earnings per share by 53% a year over the last three years. In the last year, its revenue is up 38%.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Virscend Education Company Limited Been A Good Investment?

Few Virscend Education Company Limited shareholders would feel satisfied with the return of -93% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Virscend Education pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The loss to shareholders over the past three years is certainly concerning. The poor performance of the share price might have something to do with the lack of earnings growth. 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.

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. In our study, we found 5 warning signs for Virscend Education you should be aware of, and 2 of them are potentially serious.

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.