Shareholders May Be More Conservative With Solartech International Holdings Limited's (HKG:1166) CEO Compensation For Now

Shareholders of Solartech International Holdings Limited (HKG:1166) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 03 December 2021. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out 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$176m, and paid its CEO total annual compensation worth HK$6.9m over the year to June 2021. There was no change in the compensation compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$6.9m.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.2m. Hence, we can conclude that Lai Him Chau is remunerated higher than the industry median.

Component	2021	2020	Proportion (2021)
Salary	HK$6.9m	HK$6.9m	100%
Other	-	-	-
Total Compensation	HK$6.9m	HK$6.9m	100%

Talking in terms of the industry, salary represented approximately 86% of total compensation out of all the companies we analyzed, while other remuneration made up 14% of the pie. 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 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

Solartech International Holdings Limited has seen its earnings per share (EPS) increase by 41% a year over the past three years. It achieved revenue growth of 50% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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?

The return of -33% over three years would not have pleased Solartech International Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Solartech International Holdings pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Solartech International Holdings that you should be aware of before investing.

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.

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.

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