How Is Solartech International Holdings' (HKG:1166) CEO Paid Relative To Peers?

Lai Him Chau is the CEO of Solartech International Holdings Limited (HKG:1166), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Solartech International Holdings.

See our latest analysis for Solartech International Holdings

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

According to our data, Solartech International Holdings Limited has a market capitalization of HK$190m, and paid its CEO total annual compensation worth HK$6.9m over 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.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.3m. Accordingly, our analysis reveals that Solartech International Holdings Limited pays Lai Him Chau north of the industry median.

On an industry level, around 90% of total compensation represents salary and 9.8% 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 total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

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 57% per year. It saw its revenue drop 9.1% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Solartech International Holdings Limited Been A Good Investment?

With a three year total loss of 86% for the shareholders, Solartech International Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Solartech International Holdings rewards its CEO solely through a salary, ignoring non-salary benefits completely. As previously discussed, Lai Him is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

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. We've identified 2 warning signs for Solartech International Holdings that investors should be aware of in a dynamic business environment.

Switching gears from Solartech 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.

If you decide to trade Solartech International Holdings, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.