We Think The Compensation For ST International Holdings Company Limited's (HKG:8521) CEO Looks About Right

Key Insights

• ST International Holdings will host its Annual General Meeting on 19th of June
• Total pay for CEO Bin Xi includes HK$1.47m salary
• Total compensation is similar to the industry average
• Over the past three years, ST International Holdings' EPS fell by 33% and over the past three years, the total shareholder return was 436%

ST International Holdings Company Limited (HKG:8521) 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 19th of June. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. 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.

See our latest analysis for ST International Holdings

Comparing ST International Holdings Company Limited's CEO Compensation With The Industry

At the time of writing, our data shows that ST International Holdings Company Limited has a market capitalization of HK$426m, and reported total annual CEO compensation of HK$1.5m for the year to December 2023. This means that the compensation hasn't changed much from last year. In particular, the salary of HK$1.47m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Luxury industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.0m. So it looks like ST International Holdings compensates Bin Xi in line with the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	HK$1.5m	HK$1.5m	98%
Other	HK$37k	HK$36k	2%
Total Compensation	HK$1.5m	HK$1.5m	100%

Talking in terms of the industry, salary represented approximately 94% of total compensation out of all the companies we analyzed, while other remuneration made up 6% of the pie. ST International Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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 ST International Holdings Company Limited's Growth Numbers

Over the last three years, ST International Holdings Company Limited has shrunk its earnings per share by 33% per year. Its revenue is up 8.8% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced 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 ST International Holdings Company Limited Been A Good Investment?

Most shareholders would probably be pleased with ST International Holdings Company Limited for providing a total return of 436% over three years. 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.

In Summary...

ST International Holdings pays its CEO a majority of compensation through a salary. 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. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for ST International Holdings (of which 2 shouldn'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.

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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.