Key Insights

• Chinlink International Holdings will host its Annual General Meeting on 27th of September
• Total pay for CEO Weibin Li includes HK$2.32m salary
• The overall pay is 50% above the industry average
• Chinlink International Holdings' EPS grew by 13% over the past three years while total shareholder loss over the past three years was 94%

In the past three years, the share price of Chinlink International Holdings Limited (HKG:997) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 27th of September. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Chinlink International Holdings

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

Our data indicates that Chinlink International Holdings Limited has a market capitalization of HK$32m, and total annual CEO compensation was reported as HK$2.3m for the year to March 2023. This was the same amount the CEO received in the prior year. Notably, the salary which is HK$2.32m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Trade Distributors industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.6m. This suggests that Weibin Li is paid more than the median for the industry. Moreover, Weibin Li also holds HK$19m worth of Chinlink International Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 93% of total compensation represents salary and 7% is other remuneration. Chinlink International Holdings has gone down a largely traditional route, paying Weibin Li a high salary, giving it preference over non-salary benefits. 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.

Chinlink International Holdings Limited's Growth

Chinlink International Holdings Limited has seen its earnings per share (EPS) increase by 13% a year over the past three years. Its revenue is down 20% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Chinlink International Holdings Limited Been A Good Investment?

Few Chinlink International Holdings Limited shareholders would feel satisfied with the return of -94% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Weibin receives almost all of their compensation through a salary. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Chinlink International Holdings (2 don't sit too well with us!) that you should be aware of before investing here.

Switching gears from Chinlink International Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.