Here's Why It's Unlikely That Solomon Systech (International) Limited's (HKG:2878) CEO Will See A Pay Rise This Year

Key Insights

• Solomon Systech (International) to hold its Annual General Meeting on 17th of June
• Total pay for CEO Raymond Wang includes US$687.0k salary
• The total compensation is 102% higher than the average for the industry
• Solomon Systech (International)'s three-year loss to shareholders was 17% while its EPS was down 25% over the past three years

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Shareholders will probably not be too impressed with the underwhelming results at Solomon Systech (International) Limited (HKG:2878) recently. At the upcoming AGM on 17th of June, 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Solomon Systech (International)

Comparing Solomon Systech (International) Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Solomon Systech (International) Limited has a market capitalization of HK$1.1b, and reported total annual CEO compensation of US$702k for the year to December 2024. That's a notable decrease of 9.1% on last year. In particular, the salary of US$687.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Semiconductor industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was US$347k. This suggests that Raymond Wang is paid more than the median for the industry. Moreover, Raymond Wang also holds HK$2.5m worth of Solomon Systech (International) stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. Solomon Systech (International) pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Solomon Systech (International) Limited's Growth

Over the last three years, Solomon Systech (International) Limited has shrunk its earnings per share by 25% per year. Its revenue is down 26% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Solomon Systech (International) Limited Been A Good Investment?

Since shareholders would have lost about 17% over three years, some Solomon Systech (International) Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Solomon Systech (International) 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, the board will get the chance to explain the steps it plans to take to improve business performance.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Solomon Systech (International).

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.