We Think Some Shareholders May Hesitate To Increase Sitoy Group Holdings Limited's (HKG:1023) CEO Compensation

Key Insights

• Sitoy Group Holdings' Annual General Meeting to take place on 17th of November
• Salary of HK$3.58m is part of CEO Wo Fai Yeung's total remuneration
• The total compensation is 88% higher than the average for the industry
• Sitoy Group Holdings' total shareholder return over the past three years was 36% while its EPS was down 78% over the past three years

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Sitoy Group Holdings Limited (HKG:1023) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 17th of November. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for Sitoy Group Holdings

Comparing Sitoy Group Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Sitoy Group Holdings Limited has a market capitalization of HK$509m, and reported total annual CEO compensation of HK$4.4m for the year to June 2025. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at HK$3.58m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Hong Kong Luxury industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.4m. Accordingly, our analysis reveals that Sitoy Group Holdings Limited pays Wo Fai Yeung north of the industry median. Moreover, Wo Fai Yeung also holds HK$125m worth of Sitoy Group Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2025	2024	Proportion (2025)
Salary	HK$3.6m	HK$3.6m	81%
Other	HK$853k	HK$851k	19%
Total Compensation	HK$4.4m	HK$4.4m	100%

Talking in terms of the industry, salary represented approximately 91% of total compensation out of all the companies we analyzed, while other remuneration made up 9% of the pie. Sitoy Group Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Sitoy Group Holdings Limited's Growth

Over the last three years, Sitoy Group Holdings Limited has shrunk its earnings per share by 78% per year. In the last year, its revenue is down 1.4%.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Sitoy Group Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with Sitoy Group Holdings Limited for providing a total return of 36% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Sitoy Group Holdings that you should be aware of before investing.

Important note: Sitoy Group Holdings 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.