We Think Shareholders May Want To Consider A Review Of AI X Tech Inc.'s (HKG:1490) CEO Compensation Package

Key Insights

• AI X Tech's Annual General Meeting to take place on 22nd of May
• Total pay for CEO Chong Xu includes CN¥930.0k salary
• The total compensation is similar to the average for the industry
• AI X Tech's EPS declined by 60% over the past three years while total shareholder loss over the past three years was 78%

Our free stock report includes 4 warning signs investors should be aware of before investing in AI X Tech. Read for free now.

AI X Tech Inc. (HKG:1490) has not performed well recently and CEO Chong Xu will probably need to up their game. At the upcoming AGM on 22nd of May, 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. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for AI X Tech

How Does Total Compensation For Chong Xu Compare With Other Companies In The Industry?

According to our data, AI X Tech Inc. has a market capitalization of HK$207m, and paid its CEO total annual compensation worth CN¥1.8m over the year to December 2024. That's just a smallish increase of 6.5% on last year. We note that the salary of CN¥930.0k makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the Hong Kong Media industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.7m. So it looks like AI X Tech compensates Chong Xu in line with the median for the industry. Moreover, Chong Xu also holds HK$148m worth of AI X Tech 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¥930k	CN¥833k	53%
Other	CN¥837k	CN¥826k	47%
Total Compensation	CN¥1.8m	CN¥1.7m	100%

On an industry level, roughly 81% of total compensation represents salary and 19% is other remuneration. In AI X Tech's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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 AI X Tech Inc.'s Growth Numbers

Over the last three years, AI X Tech Inc. has shrunk its earnings per share by 60% per year. In the last year, its revenue is down 2.3%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet 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 AI X Tech Inc. Been A Good Investment?

With a total shareholder return of -78% over three years, AI X Tech Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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 4 warning signs for AI X Tech (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: AI X Tech 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.

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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.