Why We Think Tongda Hong Tai Holdings Limited's (HKG:2363) CEO Compensation Is Not Excessive At All

Key Insights

• Tongda Hong Tai Holdings to hold its Annual General Meeting on 8th of May
• Salary of HK$266.0k is part of CEO Ming Li Wong's total remuneration
• The overall pay is 70% below the industry average
• Tongda Hong Tai Holdings' EPS grew by 92% over the past three years while total shareholder loss over the past three years was 56%

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The performance at Tongda Hong Tai Holdings Limited (HKG:2363) has been rather lacklustre of late and shareholders may be wondering what CEO Ming Li Wong is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 8th of May. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for Tongda Hong Tai Holdings

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

According to our data, Tongda Hong Tai Holdings Limited has a market capitalization of HK$63m, and paid its CEO total annual compensation worth HK$723k over the year to December 2024. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$266k.

For comparison, other companies in the Hong Kong Electronic industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.4m. Accordingly, Tongda Hong Tai Holdings pays its CEO under the industry median.

Component	2024	2023	Proportion (2024)
Salary	HK$266k	HK$271k	37%
Other	HK$457k	HK$456k	63%
Total Compensation	HK$723k	HK$727k	100%

On an industry level, roughly 79% of total compensation represents salary and 21% is other remuneration. In Tongda Hong Tai Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Tongda Hong Tai Holdings Limited's Growth

Over the past three years, Tongda Hong Tai Holdings Limited has seen its earnings per share (EPS) grow by 92% per year. Its revenue is down 22% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Tongda Hong Tai Holdings Limited Been A Good Investment?

The return of -56% over three years would not have pleased Tongda Hong Tai Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss is certainly disheartening. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 4 warning signs for Tongda Hong Tai Holdings (3 make us uncomfortable!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.