A Look At Solartech International Holdings' (HKG:1166) CEO Remuneration

The CEO of Solartech International Holdings Limited (HKG:1166) is Lai Him Chau, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Solartech International Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Solartech International Holdings

Comparing Solartech International Holdings Limited's CEO Compensation With the industry

Our data indicates that Solartech International Holdings Limited has a market capitalization of HK$178m, and total annual CEO compensation was reported as HK$6.9m for the year to June 2020. Notably, that's a decrease of 13% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$6.9m.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.4m. This suggests that Lai Him Chau is paid more than the median for the industry.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Speaking on a company level, Solartech International Holdings prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Solartech International Holdings Limited's Growth Numbers

Over the last three years, Solartech International Holdings Limited has shrunk its earnings per share by 27% per year. It achieved revenue growth of 13% over the last year.

Few shareholders would be pleased to read that EPS have declined. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. 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 Solartech International Holdings Limited Been A Good Investment?

Since shareholders would have lost about 89% over three years, some Solartech International Holdings Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Solartech International Holdings rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Solartech International Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Solartech International Holdings that investors should look into moving forward.

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This article by Simply Wall St is general in nature. 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.
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