We Think Shareholders May Want To Consider A Review Of Sun Hing Printing Holdings Limited's (HKG:1975) CEO Compensation Package

Key Insights

• Sun Hing Printing Holdings to hold its Annual General Meeting on 22nd of November
• CEO Kenneth Chan's total compensation includes salary of HK$9.22m
• Total compensation is 423% above industry average
• Over the past three years, Sun Hing Printing Holdings' EPS fell by 40% and over the past three years, the total loss to shareholders 30%

Sun Hing Printing Holdings Limited (HKG:1975) has not performed well recently and CEO Kenneth Chan will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 22nd of November. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Sun Hing Printing Holdings

How Does Total Compensation For Kenneth Chan Compare With Other Companies In The Industry?

According to our data, Sun Hing Printing Holdings Limited has a market capitalization of HK$185m, and paid its CEO total annual compensation worth HK$9.4m over the year to June 2024. We note that's a decrease of 47% compared to last year. Notably, the salary which is HK$9.22m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Commercial Services industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.8m. This suggests that Kenneth Chan is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	HK$9.2m	HK$18m	98%
Other	HK$141k	HK$141k	2%
Total Compensation	HK$9.4m	HK$18m	100%

On an industry level, around 80% of total compensation represents salary and 20% is other remuneration. Investors will find it interesting that Sun Hing Printing Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Sun Hing Printing Holdings Limited's Growth

Over the last three years, Sun Hing Printing Holdings Limited has shrunk its earnings per share by 40% per year. Its revenue is down 45% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Sun Hing Printing Holdings Limited Been A Good Investment?

With a total shareholder return of -30% over three years, Sun Hing Printing Holdings Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Sun Hing Printing Holdings pays its CEO a majority of compensation through a salary. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for Sun Hing Printing Holdings that investors should look into moving forward.

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.