Key Insights

• JH Educational Technology to hold its Annual General Meeting on 17th of May
• Salary of CN¥6.88m is part of CEO Yuguo Chen's total remuneration
• Total compensation is 143% above industry average
• JH Educational Technology's EPS grew by 13% over the past three years while total shareholder loss over the past three years was 82%

Shareholders of JH Educational Technology INC. (HKG:1935) will have been dismayed by the negative share price return over the last three years. 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 17th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

How Does Total Compensation For Yuguo Chen Compare With Other Companies In The Industry?

Our data indicates that JH Educational Technology INC. has a market capitalization of HK$1.2b, and total annual CEO compensation was reported as CN¥6.9m for the year to December 2023. We note that's an increase of 77% above last year. Notably, the salary of CN¥6.9m is the entirety of the CEO compensation.

On examining similar-sized companies in the Hong Kong Consumer Services industry with market capitalizations between HK$781m and HK$3.1b, we discovered that the median CEO total compensation of that group was CN¥2.8m. This suggests that Yuguo Chen is paid more than the median for the industry. What's more, Yuguo Chen holds HK$280m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. On a company level, JH Educational Technology prefers to reward its CEO through a salary, opting not to pay Yuguo Chen through 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.

JH Educational Technology INC.'s Growth

JH Educational Technology INC. has seen its earnings per share (EPS) increase by 13% a year over the past three years. It achieved revenue growth of 6.6% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has JH Educational Technology INC. Been A Good Investment?

With a total shareholder return of -82% over three years, JH Educational Technology INC. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

JH Educational Technology rewards its CEO solely through a salary, ignoring non-salary benefits completely. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. 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 be keen to know what's holding the stock back when earnings have grown. 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 compensation is one thing, but it is also interesting to check if the CEO is buying or selling JH Educational Technology (free visualization of insider trades).

Switching gears from JH Educational Technology, 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.