Key Insights

• Shenzhen International Holdings to hold its Annual General Meeting on 14th of May
• CEO Zhengyu Liu's total compensation includes salary of HK$370.0k
• The overall pay is comparable to the industry average
• Shenzhen International Holdings' EPS declined by 24% over the past three years while total shareholder loss over the past three years was 40%

The underwhelming share price performance of Shenzhen International Holdings Limited (HKG:152) in the past three years would have disappointed many shareholders. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. The AGM coming up on 14th of May will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

How Does Total Compensation For Zhengyu Liu Compare With Other Companies In The Industry?

According to our data, Shenzhen International Holdings Limited has a market capitalization of HK$15b, and paid its CEO total annual compensation worth HK$1.2m over the year to December 2023. That's a slight decrease of 6.0% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$370k.

On examining similar-sized companies in the Hong Kong Infrastructure industry with market capitalizations between HK$7.8b and HK$25b, we discovered that the median CEO total compensation of that group was HK$1.2m. This suggests that Shenzhen International Holdings remunerates its CEO largely in line with the industry average. What's more, Zhengyu Liu holds HK$4.5m 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 65% of total compensation represents salary and 35% is other remuneration. Shenzhen International Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Shenzhen International Holdings Limited's Growth Numbers

Over the last three years, Shenzhen International Holdings Limited has shrunk its earnings per share by 24% per year. It achieved revenue growth of 32% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Shenzhen International Holdings Limited Been A Good Investment?

With a total shareholder return of -40% over three years, Shenzhen International Holdings 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 returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. The upcoming AGM will provide shareholders the opportunity to revisit the company's remuneration policies and evaluate if the board's judgement and decision-making is aligned with that of the company's shareholders.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for Shenzhen International Holdings (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: Shenzhen International Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.