Here's Why We Think Smoore International Holdings Limited's (HKG:6969) CEO Compensation Looks Fair

Key Insights

• Smoore International Holdings to hold its Annual General Meeting on 23rd of May
• CEO Zhiping Chen's total compensation includes salary of CN¥2.89m
• The overall pay is 67% below the industry average
• Smoore International Holdings' EPS declined by 38% over the past three years while total shareholder return over the past three years was 1.4%

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Performance at Smoore International Holdings Limited (HKG:6969) has been rather uninspiring recently and shareholders may be wondering how CEO Zhiping Chen plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 23rd of May. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

See our latest analysis for Smoore International Holdings

Comparing Smoore International Holdings Limited's CEO Compensation With The Industry

Our data indicates that Smoore International Holdings Limited has a market capitalization of HK$109b, and total annual CEO compensation was reported as CN¥9.9m for the year to December 2024. That's a notable decrease of 29% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥2.9m.

In comparison with other companies in the Hong Kong Tobacco industry with market capitalizations over HK$63b, the reported median total CEO compensation was CN¥30m. In other words, Smoore International Holdings pays its CEO lower than the industry median. Moreover, Zhiping Chen also holds HK$37b worth of Smoore International Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	CN¥2.9m	CN¥2.7m	29%
Other	CN¥7.0m	CN¥11m	71%
Total Compensation	CN¥9.9m	CN¥14m	100%

Speaking on an industry level, nearly 30% of total compensation represents salary, while the remainder of 70% is other remuneration. Smoore International Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Smoore International Holdings Limited's Growth

Smoore International Holdings Limited has reduced its earnings per share by 38% a year over the last three years. In the last year, its revenue is up 5.3%.

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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Smoore International Holdings Limited Been A Good Investment?

With a total shareholder return of 1.4% over three years, Smoore International Holdings Limited has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

Shareholder returns while positive, need to be looked at along with earnings, which have failed to grow and this could mean that the current momentum may not continue. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Smoore International Holdings that investors should be aware of in a dynamic business environment.

Important note: Smoore International 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.

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.