Here's Why It's Unlikely That SPT Energy Group Inc.'s (HKG:1251) CEO Will See A Pay Rise This Year

Key Insights

• SPT Energy Group to hold its Annual General Meeting on 26th of August
• CEO Ethan Wu's total compensation includes salary of CN¥1.47m
• The overall pay is comparable to the industry average
• SPT Energy Group's EPS declined by 132% over the past three years while total shareholder loss over the past three years was 11%

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SPT Energy Group Inc. (HKG:1251) has not performed well recently and CEO Ethan Wu will probably need to up their game. At the upcoming AGM on 26th of August, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for SPT Energy Group

How Does Total Compensation For Ethan Wu Compare With Other Companies In The Industry?

At the time of writing, our data shows that SPT Energy Group Inc. has a market capitalization of HK$488m, and reported total annual CEO compensation of CN¥1.7m for the year to December 2024. Notably, that's an increase of 13% over the year before. We note that the salary portion, which stands at CN¥1.47m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Hong Kong Energy Services industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥1.6m. This suggests that SPT Energy Group remunerates its CEO largely in line with the industry average. Moreover, Ethan Wu also holds HK$59m worth of SPT Energy Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 71% of total compensation represents salary, while the remainder of 29% is other remuneration. SPT Energy Group pays out 88% of remuneration in the form of a salary, significantly higher than the industry average. 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 SPT Energy Group Inc.'s Growth Numbers

SPT Energy Group Inc. has reduced its earnings per share by 132% a year over the last three years. It saw its revenue drop 13% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has SPT Energy Group Inc. Been A Good Investment?

Given the total shareholder loss of 11% over three years, many shareholders in SPT Energy Group Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 2 which are potentially serious) in SPT Energy Group we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.