It Looks Like Sing Lee Software (Group) Limited's (HKG:8076) CEO May Expect Their Salary To Be Put Under The Microscope

Sing Lee Software (Group) Limited (HKG:8076) has not performed well recently and CEO Xue Xin Lin will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 26 May 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Sing Lee Software (Group)

Comparing Sing Lee Software (Group) Limited's CEO Compensation With the industry

According to our data, Sing Lee Software (Group) Limited has a market capitalization of HK$95m, and paid its CEO total annual compensation worth CN¥759k over the year to December 2020. Notably, that's an increase of 17% over the year before. In particular, the salary of CN¥603.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥922k. From this we gather that Xue Xin Lin is paid around the median for CEOs in the industry. Furthermore, Xue Xin Lin directly owns HK$682k worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	CN¥603k	CN¥479k	79%
Other	CN¥156k	CN¥169k	21%
Total Compensation	CN¥759k	CN¥648k	100%

Speaking on an industry level, nearly 80% of total compensation represents salary, while the remainder of 20% is other remuneration. Sing Lee Software (Group) is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Sing Lee Software (Group) Limited's Growth

Sing Lee Software (Group) Limited has reduced its earnings per share by 60% a year over the last three years. It saw its revenue drop 20% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Sing Lee Software (Group) Limited Been A Good Investment?

Few Sing Lee Software (Group) Limited shareholders would feel satisfied with the return of -52% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 2 which are a bit unpleasant) in Sing Lee Software (Group) we think you should know about.

Important note: Sing Lee Software (Group) 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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