We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Hingtex Holdings Limited's (HKG:1968) CEO For Now

Key Insights

• Hingtex Holdings will host its Annual General Meeting on 30th of May
• Salary of HK$3.03m is part of CEO Stephen Tung's total remuneration
• The overall pay is 40% above the industry average
• Hingtex Holdings' EPS declined by 9.4% over the past three years while total shareholder loss over the past three years was 39%

We've discovered 3 warning signs about Hingtex Holdings. View them for free.

Shareholders of Hingtex Holdings Limited (HKG:1968) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also poor, despite revenues growing. Shareholders will have a chance to take their concerns to the board at the next AGM on 30th of May and vote on resolutions including executive compensation, which studies show may have an impact on company performance. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

See our latest analysis for Hingtex Holdings

How Does Total Compensation For Stephen Tung Compare With Other Companies In The Industry?

At the time of writing, our data shows that Hingtex Holdings Limited has a market capitalization of HK$67m, and reported total annual CEO compensation of HK$3.1m for the year to December 2024. This means that the compensation hasn't changed much from last year. In particular, the salary of HK$3.03m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Luxury industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.2m. This suggests that Stephen Tung is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	HK$3.0m	HK$3.1m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$3.1m	HK$3.1m	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. Investors will find it interesting that Hingtex 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.

A Look at Hingtex Holdings Limited's Growth Numbers

Hingtex Holdings Limited has reduced its earnings per share by 9.4% a year over the last three years. Its revenue is up 32% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Hingtex Holdings Limited Been A Good Investment?

Few Hingtex Holdings Limited shareholders would feel satisfied with the return of -39% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Hingtex Holdings pays its CEO a majority of compensation through a salary. The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Hingtex Holdings (of which 2 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.