Key Insights

• China Digital Video Holdings will host its Annual General Meeting on 28th of September
• Salary of CN¥95.0k is part of CEO Fu Shuang Zheng's total remuneration
• The total compensation is similar to the average for the industry
• China Digital Video Holdings' three-year loss to shareholders was 20% while its EPS grew by 7.7% over the past three years

The underwhelming share price performance of China Digital Video Holdings Limited (HKG:8280) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 28th of September could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for China Digital Video Holdings

How Does Total Compensation For Fu Shuang Zheng Compare With Other Companies In The Industry?

According to our data, China Digital Video Holdings Limited has a market capitalization of HK$20m, and paid its CEO total annual compensation worth CN¥856k over the year to March 2023. We note that's an increase of 49% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥95k.

For comparison, other companies in the Hong Kong Entertainment industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.1m. From this we gather that Fu Shuang Zheng is paid around the median for CEOs in the industry. Moreover, Fu Shuang Zheng also holds HK$7.0m worth of China Digital Video Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 90% of total compensation represents salary, while the remainder of 10% is other remuneration. China Digital Video Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

China Digital Video Holdings Limited's Growth

Over the past three years, China Digital Video Holdings Limited has seen its earnings per share (EPS) grow by 7.7% per year. Its revenue is down 14% over the previous year.

We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 China Digital Video Holdings Limited Been A Good Investment?

Since shareholders would have lost about 20% over three years, some China Digital Video Holdings Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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. That's why we did some digging and identified 2 warning signs for China Digital Video Holdings that you should be aware of before investing.

Switching gears from China Digital Video 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.