Techtronic Industries Company Limited's (HKG:669) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Techtronic Industries will host its Annual General Meeting on 10th of May
• Total pay for CEO Joe Galli includes US$1.85m salary
• The overall pay is 3,890% above the industry average
• Techtronic Industries' three-year loss to shareholders was 25% while its EPS grew by 6.7% over the past three years

The underwhelming share price performance of Techtronic Industries Company Limited (HKG:669) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 10th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Techtronic Industries

How Does Total Compensation For Joe Galli Compare With Other Companies In The Industry?

At the time of writing, our data shows that Techtronic Industries Company Limited has a market capitalization of HK$194b, and reported total annual CEO compensation of US$33m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.8m.

In comparison with other companies in the Hong Kong Machinery industry with market capitalizations over HK$63b, the reported median total CEO compensation was US$816k. This suggests that Joe Galli is paid more than the median for the industry. Furthermore, Joe Galli directly owns HK$1.2b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$1.8m	US$1.9m	6%
Other	US$31m	US$31m	94%
Total Compensation	US$33m	US$33m	100%

Talking in terms of the industry, salary represented approximately 76% of total compensation out of all the companies we analyzed, while other remuneration made up 24% of the pie. Techtronic Industries pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Techtronic Industries Company Limited's Growth

Over the past three years, Techtronic Industries Company Limited has seen its earnings per share (EPS) grow by 6.7% per year. Its revenue is up 3.6% over the last year.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Techtronic Industries Company Limited Been A Good Investment?

Since shareholders would have lost about 25% over three years, some Techtronic Industries Company Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. 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.

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 1 warning sign for Techtronic Industries that investors should be aware of in a dynamic business environment.

Switching gears from Techtronic Industries, 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.

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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.