It Looks Like Chinasoft International Limited's (HKG:354) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Chinasoft International to hold its Annual General Meeting on 20th of May
• Total pay for CEO Henry Chen includes CN¥3.48m salary
• The overall pay is 1,117% above the industry average
• Over the past three years, Chinasoft International's EPS fell by 20% and over the past three years, the total loss to shareholders 18%

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The results at Chinasoft International Limited (HKG:354) have been quite disappointing recently and CEO Henry Chen bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 20th of May. 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.

See our latest analysis for Chinasoft International

How Does Total Compensation For Henry Chen Compare With Other Companies In The Industry?

At the time of writing, our data shows that Chinasoft International Limited has a market capitalization of HK$14b, and reported total annual CEO compensation of CN¥17m for the year to December 2024. Notably, that's an increase of 31% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CN¥3.5m.

On examining similar-sized companies in the Hong Kong IT industry with market capitalizations between HK$7.8b and HK$25b, we discovered that the median CEO total compensation of that group was CN¥1.4m. Hence, we can conclude that Henry Chen is remunerated higher than the industry median. Moreover, Henry Chen also holds HK$1.3b worth of Chinasoft International 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 82% of total compensation represents salary, while the remainder of 18% is other remuneration. In Chinasoft International's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Chinasoft International Limited's Growth Numbers

Chinasoft International Limited has reduced its earnings per share by 20% a year over the last three years. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Chinasoft International Limited Been A Good Investment?

With a three year total loss of 18% for the shareholders, Chinasoft International Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Chinasoft International that investors should be aware of in a dynamic business environment.

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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.