We Take A Look At Why Cirtek Holdings Limited's (HKG:1433) CEO Compensation Is Well Earned

Key Insights

• Cirtek Holdings to hold its Annual General Meeting on 20th of June
• CEO Candy Law's total compensation includes salary of HK$1.39m
• Total compensation is similar to the industry average
• Cirtek Holdings' EPS grew by 61% over the past three years while total shareholder return over the past three years was 49%

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The performance at Cirtek Holdings Limited (HKG:1433) has been quite strong recently and CEO Candy Law has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 20th of June. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for Cirtek Holdings

How Does Total Compensation For Candy Law Compare With Other Companies In The Industry?

At the time of writing, our data shows that Cirtek Holdings Limited has a market capitalization of HK$163m, and reported total annual CEO compensation of HK$1.9m for the year to December 2024. There was no change in the compensation compared to last year. In particular, the salary of HK$1.39m, makes up a huge portion of the total compensation being paid to 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$2.2m. So it looks like Cirtek Holdings compensates Candy Law in line with the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	HK$1.4m	HK$1.3m	73%
Other	HK$514k	HK$588k	27%
Total Compensation	HK$1.9m	HK$1.9m	100%

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. In Cirtek Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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.

Cirtek Holdings Limited's Growth

Cirtek Holdings Limited has seen its earnings per share (EPS) increase by 61% a year over the past three years. In the last year, its revenue is up 48%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Cirtek Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 49% over three years, Cirtek Holdings Limited has done well by shareholders. 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...

Some shareholders will probably be more lenient on CEO compensation in the upcoming AGM given the pleasing performance of the company recently. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Cirtek Holdings that investors should look into moving forward.

Important note: Cirtek 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.