Shareholders May Not Be So Generous With Starlite Holdings Limited's (HKG:403) CEO Compensation And Here's Why

Key Insights

• Starlite Holdings to hold its Annual General Meeting on 27th of August
• CEO Kwong Yu Lam's total compensation includes salary of HK$4.93m
• The overall pay is 225% above the industry average
• Over the past three years, Starlite Holdings' EPS fell by 109% and over the past three years, the total shareholder return was 4.2%

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The share price of Starlite Holdings Limited (HKG:403) has struggled to grow by much over the last few years and probably has to do with the fact that earnings growth has gone backwards. Some of these issues will occupy shareholders' minds as the AGM rolls around on 27th of August. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Starlite Holdings

Comparing Starlite Holdings Limited's CEO Compensation With The Industry

According to our data, Starlite Holdings Limited has a market capitalization of HK$99m, and paid its CEO total annual compensation worth HK$5.7m over the year to March 2025. That's a fairly small increase of 4.1% over the previous year. Notably, the salary which is HK$4.93m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Packaging industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.8m. This suggests that Kwong Yu Lam is paid more than the median for the industry. What's more, Kwong Yu Lam holds HK$40m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 71% of total compensation out of all the companies we analyzed, while other remuneration made up 29% of the pie. Starlite Holdings pays out 87% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Starlite Holdings Limited's Growth Numbers

Over the last three years, Starlite Holdings Limited has shrunk its earnings per share by 109% per year. It achieved revenue growth of 7.3% over the last year.

Overall this is not a very positive result for shareholders. 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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Starlite Holdings Limited Been A Good Investment?

Starlite Holdings Limited has not done too badly by shareholders, with a total return of 4.2%, over three years. It would be nice to see that metric improve in the future. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

The flat share price growth combined with the the fact that earnings have failed to grow makes us wonder whether the share price will have any further strong momentum. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for Starlite Holdings (of which 1 is a bit concerning!) 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.