Shareholders May Be More Conservative With Cornerstone Technologies Holdings Limited's (HKG:8391) CEO Compensation For Now

Key Insights

• Cornerstone Technologies Holdings will host its Annual General Meeting on 30th of June
• Salary of HK$3.24m is part of CEO Vincent Yip's total remuneration
• The overall pay is 258% above the industry average
• Cornerstone Technologies Holdings' EPS declined by 5.5% over the past three years while total shareholder loss over the past three years was 49%

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In the past three years, the share price of Cornerstone Technologies Holdings Limited (HKG:8391) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 30th of June, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

View our latest analysis for Cornerstone Technologies Holdings

How Does Total Compensation For Vincent Yip Compare With Other Companies In The Industry?

At the time of writing, our data shows that Cornerstone Technologies Holdings Limited has a market capitalization of HK$362m, and reported total annual CEO compensation of HK$3.7m for the year to December 2024. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at HK$3.24m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Electrical industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.0m. Hence, we can conclude that Vincent Yip is remunerated higher than the industry median. What's more, Vincent Yip holds HK$2.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. Cornerstone Technologies Holdings pays out 88% of remuneration in the form of a salary, significantly higher than the industry average. 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 Cornerstone Technologies Holdings Limited's Growth Numbers

Cornerstone Technologies Holdings Limited has reduced its earnings per share by 5.5% a year over the last three years. Its revenue is up 96% over the last year.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Cornerstone Technologies Holdings Limited Been A Good Investment?

With a total shareholder return of -49% over three years, Cornerstone Technologies Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In 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 is in line with their expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 2 which are concerning) in Cornerstone Technologies Holdings we think you should know about.

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.