Increases to Sundart Holdings Limited's (HKG:1568) CEO Compensation Might Cool off for now

Key Insights

• Sundart Holdings will host its Annual General Meeting on 2nd of June
• Salary of HK$2.40m is part of CEO Tak Kwan Ng's total remuneration
• Total compensation is 1,390% above industry average
• Sundart Holdings' total shareholder return over the past three years was 139% while its EPS was down 4.8% over the past three years

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Despite strong share price growth of 139% for Sundart Holdings Limited (HKG:1568) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 2nd of June may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for Sundart Holdings

How Does Total Compensation For Tak Kwan Ng Compare With Other Companies In The Industry?

At the time of writing, our data shows that Sundart Holdings Limited has a market capitalization of HK$1.7b, and reported total annual CEO compensation of HK$13m for the year to December 2024. We note that's an increase of 8.1% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$2.4m.

In comparison with other companies in the Hong Kong Consumer Durables industry with market capitalizations ranging from HK$784m to HK$3.1b, the reported median CEO total compensation was HK$899k. This suggests that Tak Kwan Ng is paid more than the median for the industry.

Speaking on an industry level, nearly 78% of total compensation represents salary, while the remainder of 22% is other remuneration. Sundart Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Sundart Holdings Limited's Growth Numbers

Sundart Holdings Limited has reduced its earnings per share by 4.8% a year over the last three years. It achieved revenue growth of 9.8% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Sundart Holdings Limited Been A Good Investment?

We think that the total shareholder return of 139%, over three years, would leave most Sundart Holdings Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. 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.

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 Sundart Holdings (1 is a bit unpleasant!) that you should be aware of before investing here.

Switching gears from Sundart Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.