Increases to CEO Compensation Might Be Put On Hold For Now at Automated Systems Holdings Limited (HKG:771)

Key Insights

• Automated Systems Holdings to hold its Annual General Meeting on 21st of May
• CEO Leon Wang's total compensation includes salary of HK$3.39m
• The overall pay is 500% above the industry average
• Automated Systems Holdings' three-year loss to shareholders was 16% while its EPS grew by 230% over the past three years

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The underwhelming share price performance of Automated Systems Holdings Limited (HKG:771) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 21st of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Automated Systems Holdings

How Does Total Compensation For Leon Wang Compare With Other Companies In The Industry?

Our data indicates that Automated Systems Holdings Limited has a market capitalization of HK$609m, and total annual CEO compensation was reported as HK$10m for the year to December 2024. Notably, that's an increase of 15% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$3.4m.

On comparing similar-sized companies in the Hong Kong IT industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.7m. Accordingly, our analysis reveals that Automated Systems Holdings Limited pays Leon Wang north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	HK$3.4m	HK$2.7m	33%
Other	HK$6.8m	HK$6.2m	67%
Total Compensation	HK$10m	HK$8.9m	100%

Speaking on an industry level, nearly 82% of total compensation represents salary, while the remainder of 18% is other remuneration. Automated Systems Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Automated Systems Holdings Limited's Growth Numbers

Over the past three years, Automated Systems Holdings Limited has seen its earnings per share (EPS) grow by 230% per year. In the last year, its revenue changed by just 0.5%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Automated Systems Holdings Limited Been A Good Investment?

Given the total shareholder loss of 16% over three years, many shareholders in Automated Systems Holdings Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Automated Systems Holdings that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.