It's Unlikely That Solartech International Holdings Limited's (HKG:1166) CEO Will See A Huge Pay Rise This Year

Performance at Solartech International Holdings Limited (HKG:1166) has been reasonably good and CEO Lai Him Chau has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 05 December 2022. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Our analysis indicates that 1166 is potentially overvalued!

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$133m, and paid its CEO total annual compensation worth HK$7.0m over the year to June 2022. That is, the compensation was roughly the same as last year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$7.0m.

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$1.0m. This suggests that Lai Him Chau is paid more than the median for the industry.

Component	2022	2021	Proportion (2022)
Salary	HK$7.0m	HK$6.9m	100%
Other	-	-	-
Total Compensation	HK$7.0m	HK$6.9m	100%

On an industry level, around 88% of total compensation represents salary and 12% is other remuneration. On a company level, Solartech International Holdings prefers to reward its CEO through a salary, opting not to pay Lai Him Chau through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Solartech International Holdings Limited's Growth

Solartech International Holdings Limited's earnings per share (EPS) grew 90% per year over the last three years. Its revenue is up 8.9% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Solartech International Holdings Limited Been A Good Investment?

Solartech International Holdings Limited has not done too badly by shareholders, with a total return of 7.7%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

In Summary...

Solartech International Holdings rewards its CEO solely through a salary, ignoring non-salary benefits completely. Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Solartech International Holdings that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.