Shareholders Will Probably Be Cautious Of Increasing Sunfonda Group Holdings Limited's (HKG:1771) CEO Compensation At The Moment

Key Insights

• Sunfonda Group Holdings' Annual General Meeting to take place on 28th of May
• CEO Man Chiu's total compensation includes salary of CN¥645.0k
• Total compensation is 58% below industry average
• Sunfonda Group Holdings' three-year loss to shareholders was 80% while its EPS was down 130% over the past three years

Our free stock report includes 3 warning signs investors should be aware of before investing in Sunfonda Group Holdings. Read for free now.

The disappointing performance at Sunfonda Group Holdings Limited (HKG:1771) will make some shareholders rather disheartened. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 28th of May. From our analysis below, we think CEO compensation looks appropriate for now.

View our latest analysis for Sunfonda Group Holdings

How Does Total Compensation For Man Chiu Compare With Other Companies In The Industry?

Our data indicates that Sunfonda Group Holdings Limited has a market capitalization of HK$201m, and total annual CEO compensation was reported as CN¥655k for the year to December 2024. We note that's a decrease of 19% compared to last year. In particular, the salary of CN¥645.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Specialty Retail industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.5m. That is to say, Man Chiu is paid under the industry median.

Component	2024	2023	Proportion (2024)
Salary	CN¥645k	CN¥800k	98%
Other	CN¥10k	CN¥10k	2%
Total Compensation	CN¥655k	CN¥810k	100%

On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. Sunfonda Group Holdings has gone down a largely traditional route, paying Man Chiu a high salary, giving it preference over non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Sunfonda Group Holdings Limited's Growth

Sunfonda Group Holdings Limited has reduced its earnings per share by 130% a year over the last three years. Its revenue is down 22% over the previous year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Sunfonda Group Holdings Limited Been A Good Investment?

Few Sunfonda Group Holdings Limited shareholders would feel satisfied with the return of -80% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Sunfonda Group Holdings pays its CEO a majority of compensation through a salary. 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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Sunfonda Group Holdings (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Sunfonda Group Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.