What We Learned About Vixtel Technologies Holdings' (HKG:1782) CEO Compensation

This article will reflect on the compensation paid to Tak Sie who has served as CEO of Vixtel Technologies Holdings Limited (HKG:1782) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Vixtel Technologies Holdings

Comparing Vixtel Technologies Holdings Limited's CEO Compensation With the industry

According to our data, Vixtel Technologies Holdings Limited has a market capitalization of HK$254m, and paid its CEO total annual compensation worth CN¥1.3m over the year to December 2019. That's just a smallish increase of 5.5% on last year. We note that the salary portion, which stands at CN¥1.21m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.6m. This suggests that Vixtel Technologies Holdings remunerates its CEO largely in line with the industry average. Moreover, Tak Sie also holds HK$52m worth of Vixtel Technologies Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 60% of total compensation represents salary, while the remainder of 40% is other remuneration. Investors will find it interesting that Vixtel Technologies Holdings pays the bulk of its rewards through a traditional salary, instead of 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.

Vixtel Technologies Holdings Limited's Growth

Over the last three years, Vixtel Technologies Holdings Limited has shrunk its earnings per share by 16% per year. In the last year, its revenue is down 9.4%.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Vixtel Technologies Holdings Limited Been A Good Investment?

With a three year total loss of 52% for the shareholders, Vixtel Technologies Holdings Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Tak receives almost all of their compensation through a salary. As we noted earlier, Vixtel Technologies Holdings pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Vixtel Technologies Holdings that investors should look into moving forward.

Important note: Vixtel Technologies Holdings 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. 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.
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