Shareholders May Be Wary Of Increasing ITE (Holdings) Limited's (HKG:8092) CEO Compensation Package

Key Insights

• ITE (Holdings) to hold its Annual General Meeting on 5th of August
• Total pay for CEO Vincent Lau includes HK$1.61m salary
• The total compensation is 39% higher than the average for the industry
• Over the past three years, ITE (Holdings)'s EPS fell by 38% and over the past three years, the total loss to shareholders 33%

The results at ITE (Holdings) Limited (HKG:8092) have been quite disappointing recently and CEO Vincent Lau bears some responsibility for this. At the upcoming AGM on 5th of August, 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. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for ITE (Holdings)

Comparing ITE (Holdings) Limited's CEO Compensation With The Industry

At the time of writing, our data shows that ITE (Holdings) Limited has a market capitalization of HK$23m, and reported total annual CEO compensation of HK$1.7m for the year to March 2024. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at HK$1.61m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong IT industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.2m. Accordingly, our analysis reveals that ITE (Holdings) Limited pays Vincent Lau north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	HK$1.6m	HK$1.6m	95%
Other	HK$89k	HK$87k	5%
Total Compensation	HK$1.7m	HK$1.7m	100%

On an industry level, around 88% of total compensation represents salary and 12% is other remuneration. Our data reveals that ITE (Holdings) allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at ITE (Holdings) Limited's Growth Numbers

ITE (Holdings) Limited has reduced its earnings per share by 38% a year over the last three years. Its revenue is down 20% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 ITE (Holdings) Limited Been A Good Investment?

The return of -33% over three years would not have pleased ITE (Holdings) Limited 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 6 warning signs for ITE (Holdings) (3 can't be ignored!) that you should be aware of before investing here.

Switching gears from ITE (Holdings), if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com