Shareholders May Not Be So Generous With Johnson Electric Holdings Limited's (HKG:179) CEO Compensation And Here's Why

Key Insights

• Johnson Electric Holdings' Annual General Meeting to take place on 17th of July
• Salary of US$981.0k is part of CEO Patrick Wang's total remuneration
• The total compensation is 1,166% higher than the average for the industry
• Johnson Electric Holdings' total shareholder return over the past three years was 137% while its EPS grew by 20% over the past three years

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Performance at Johnson Electric Holdings Limited (HKG:179) has been reasonably good and CEO Patrick Wang has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 17th of July. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Johnson Electric Holdings

How Does Total Compensation For Patrick Wang Compare With Other Companies In The Industry?

At the time of writing, our data shows that Johnson Electric Holdings Limited has a market capitalization of HK$19b, and reported total annual CEO compensation of US$2.7m for the year to March 2025. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at US$981k.

On examining similar-sized companies in the Hong Kong Auto Components industry with market capitalizations between HK$7.8b and HK$25b, we discovered that the median CEO total compensation of that group was US$215k. Accordingly, our analysis reveals that Johnson Electric Holdings Limited pays Patrick Wang north of the industry median. Furthermore, Patrick Wang directly owns HK$52m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. It's interesting to note that Johnson Electric Holdings allocates a smaller portion of compensation to salary in comparison to the broader 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 Johnson Electric Holdings Limited's Growth Numbers

Over the past three years, Johnson Electric Holdings Limited has seen its earnings per share (EPS) grow by 20% per year. It saw its revenue drop 4.4% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Johnson Electric Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 137% over three years, Johnson Electric Holdings Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for Johnson Electric Holdings (1 is potentially serious!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.