Shareholders May Be A Bit More Conservative With Sun.King Technology Group Limited's (HKG:580) CEO Compensation For Now

Key Insights

• Sun.King Technology Group's Annual General Meeting to take place on 6th of June
• CEO Renyuan Gong's total compensation includes salary of CN¥1.40m
• The total compensation is similar to the average for the industry
• Sun.King Technology Group's three-year loss to shareholders was 51% while its EPS grew by 90% over the past three years

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In the past three years, the share price of Sun.King Technology Group Limited (HKG:580) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 6th of June. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Sun.King Technology Group

How Does Total Compensation For Renyuan Gong Compare With Other Companies In The Industry?

Our data indicates that Sun.King Technology Group Limited has a market capitalization of HK$2.0b, and total annual CEO compensation was reported as CN¥3.3m for the year to December 2024. We note that's an increase of 15% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥1.4m.

On examining similar-sized companies in the Hong Kong Electrical industry with market capitalizations between HK$784m and HK$3.1b, we discovered that the median CEO total compensation of that group was CN¥3.3m. So it looks like Sun.King Technology Group compensates Renyuan Gong in line with the median for the industry. Furthermore, Renyuan Gong directly owns HK$19m 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. In Sun.King Technology Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Sun.King Technology Group Limited's Growth Numbers

Over the past three years, Sun.King Technology Group Limited has seen its earnings per share (EPS) grow by 90% per year. It achieved revenue growth of 53% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing 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 Sun.King Technology Group Limited Been A Good Investment?

With a total shareholder return of -51% over three years, Sun.King Technology Group Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Sun.King Technology Group that investors should think about before committing capital to this stock.

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.