Here's Why It's Unlikely That Sunlight (1977) Holdings Limited's (HKG:8451) CEO Will See A Pay Rise This Year

Key Insights

• Sunlight (1977) Holdings to hold its Annual General Meeting on 08 February 2023
• CEO Liang Sie Chua's total compensation includes salary of S$234.0k
• Total compensation is similar to the industry average
• Sunlight (1977) Holdings' EPS grew by -14% over the past three years while total shareholder return over the past three years was -26%

Sunlight (1977) Holdings Limited (HKG:8451) has not performed well recently and CEO Liang Sie Chua will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 08 February 2023. 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.

View our latest analysis for Sunlight (1977) Holdings

How Does Total Compensation For Liang Sie Chua Compare With Other Companies In The Industry?

Our data indicates that Sunlight (1977) Holdings Limited has a market capitalization of HK$43m, and total annual CEO compensation was reported as S$326k for the year to September 2022. That's just a smallish increase of 7.2% on last year. We note that the salary portion, which stands at S$234.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Retail Distributors industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of S$333k. This suggests that Sunlight (1977) Holdings remunerates its CEO largely in line with the industry average.

On an industry level, around 93% of total compensation represents salary and 7% is other remuneration. In Sunlight (1977) Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Sunlight (1977) Holdings Limited's Growth

Over the last three years, Sunlight (1977) Holdings Limited has shrunk its earnings per share by 14% per year. In the last year, its revenue is up 2.2%.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Sunlight (1977) Holdings Limited Been A Good Investment?

Since shareholders would have lost about 26% over three years, some Sunlight (1977) Holdings Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

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.

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. That's why we did some digging and identified 2 warning signs for Sunlight (1977) Holdings that you should be aware of before investing.

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.