We Take A Look At Why China Information Technology Development Limited's (HKG:8178) CEO Compensation Is Well Earned

Key Insights

• China Information Technology Development to hold its Annual General Meeting on 24th of June
• Total pay for CEO Daniel Wong includes HK$840.0k salary
• The total compensation is similar to the average for the industry
• China Information Technology Development's EPS grew by 69% over the past three years while total shareholder return over the past three years was 129%

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We have been pretty impressed with the performance at China Information Technology Development Limited (HKG:8178) recently and CEO Daniel Wong deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 24th of June. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for China Information Technology Development

How Does Total Compensation For Daniel Wong Compare With Other Companies In The Industry?

According to our data, China Information Technology Development Limited has a market capitalization of HK$234m, and paid its CEO total annual compensation worth HK$1.3m over the year to December 2024. That's a notable increase of 14% on last year. In particular, the salary of HK$840.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Software industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.4m. From this we gather that Daniel Wong is paid around the median for CEOs in the industry. What's more, Daniel Wong holds HK$2.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 68% of total compensation represents salary, while the remainder of 32% is other remuneration. Although there is a difference in how total compensation is set, China Information Technology Development more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at China Information Technology Development Limited's Growth Numbers

Over the past three years, China Information Technology Development Limited has seen its earnings per share (EPS) grow by 69% per year. In the last year, its revenue is down 16%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has China Information Technology Development Limited Been A Good Investment?

We think that the total shareholder return of 129%, over three years, would leave most China Information Technology Development Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for China Information Technology Development that investors should look into moving forward.

Switching gears from China Information Technology Development, 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.