Here's Why Telecom Service One Holdings Limited's (HKG:3997) CEO May Not Expect A Pay Rise This Year

Key Insights

• Telecom Service One Holdings to hold its Annual General Meeting on 25th of September
• Total pay for CEO Sunny Cheung includes HK$432.0k salary
• The total compensation is 60% less than the average for the industry
• Over the past three years, Telecom Service One Holdings' EPS fell by 44% and over the past three years, the total loss to shareholders 88%

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The disappointing performance at Telecom Service One Holdings Limited (HKG:3997) will make some shareholders rather disheartened. At the upcoming AGM on 25th of September, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.

View our latest analysis for Telecom Service One Holdings

Comparing Telecom Service One Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Telecom Service One Holdings Limited has a market capitalization of HK$78m, and reported total annual CEO compensation of HK$530k for the year to March 2025. This was the same amount the CEO received in the prior year. We note that the salary portion, which stands at HK$432.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Hong Kong Commercial Services industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.3m. That is to say, Sunny Cheung is paid under the industry median. Moreover, Sunny Cheung also holds HK$5.7m worth of Telecom Service One Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. Telecom Service One Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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 Telecom Service One Holdings Limited's Growth Numbers

Over the last three years, Telecom Service One Holdings Limited has shrunk its earnings per share by 44% per year. Its revenue is down 19% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Telecom Service One Holdings Limited Been A Good Investment?

Few Telecom Service One Holdings Limited shareholders would feel satisfied with the return of -88% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in 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. We identified 3 warning signs for Telecom Service One Holdings (2 shouldn't be ignored!) that you should be aware of before investing here.

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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.