Shareholders May Be More Conservative With Asia Tele-Net and Technology Corporation Limited's (HKG:679) CEO Compensation For Now

Key Insights

• Asia Tele-Net and Technology's Annual General Meeting to take place on 24th of June
• Total pay for CEO Wilfred Lam includes HK$8.40m salary
• Total compensation is 1,142% above industry average
• Asia Tele-Net and Technology's EPS grew by 35% over the past three years while total shareholder loss over the past three years was 16%

The underwhelming share price performance of Asia Tele-Net and Technology Corporation Limited (HKG:679) in the past three years would have disappointed many shareholders. 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 24th of June. 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 Asia Tele-Net and Technology

How Does Total Compensation For Wilfred Lam Compare With Other Companies In The Industry?

At the time of writing, our data shows that Asia Tele-Net and Technology Corporation Limited has a market capitalization of HK$341m, and reported total annual CEO compensation of HK$24m for the year to December 2023. There was no change in the compensation compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$8.4m.

For comparison, other companies in the Hong Kong Machinery industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.0m. Hence, we can conclude that Wilfred Lam is remunerated higher than the industry median. Furthermore, Wilfred Lam directly owns HK$46m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	HK$8.4m	HK$8.4m	34%
Other	HK$16m	HK$16m	66%
Total Compensation	HK$24m	HK$24m	100%

Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. In Asia Tele-Net and Technology's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Asia Tele-Net and Technology Corporation Limited's Growth

Asia Tele-Net and Technology Corporation Limited has seen its earnings per share (EPS) increase by 35% a year over the past three years. In the last year, its revenue is up 23%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Asia Tele-Net and Technology Corporation Limited Been A Good Investment?

With a three year total loss of 16% for the shareholders, Asia Tele-Net and Technology Corporation Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. 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. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Asia Tele-Net and Technology (of which 2 are a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: Asia Tele-Net and Technology is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.

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