Key Insights

• Shineroad International Holdings to hold its Annual General Meeting on 17th of May
• CEO Xin Rong Huang's total compensation includes salary of CN¥652.0k
• Total compensation is 64% below industry average
• Shineroad International Holdings' EPS declined by 17% over the past three years while total shareholder return over the past three years was 11%

Performance at Shineroad International Holdings Limited (HKG:1587) has been rather uninspiring recently and shareholders may be wondering how CEO Xin Rong Huang plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 17th of May. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

How Does Total Compensation For Xin Rong Huang Compare With Other Companies In The Industry?

Our data indicates that Shineroad International Holdings Limited has a market capitalization of HK$299m, and total annual CEO compensation was reported as CN¥685k for the year to December 2023. That is, the compensation was roughly the same as last year. In particular, the salary of CN¥652.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Consumer Retailing industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.9m. This suggests that Xin Rong Huang is paid below the industry median.

On an industry level, roughly 63% of total compensation represents salary and 37% is other remuneration. Shineroad International Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Shineroad International Holdings Limited's Growth

Shineroad International Holdings Limited has reduced its earnings per share by 17% a year over the last three years. Its revenue is down 6.1% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Shineroad International Holdings Limited Been A Good Investment?

With a total shareholder return of 11% over three years, Shineroad International Holdings Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Shineroad International Holdings pays its CEO a majority of compensation through a salary. While it's true that shareholders have seen decent returns, it's hard to overlook the lack of earnings growth and this makes us wonder if the current returns can continue. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 3 warning signs for Shineroad International Holdings that investors should look into moving forward.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.