We Discuss Why PAX Global Technology Limited's (HKG:327) CEO Compensation May Be Closely Reviewed
Key Insights
- PAX Global Technology will host its Annual General Meeting on 21st of May
- Total pay for CEO Jack Lu includes HK$5.57m salary
- The overall pay is 425% above the industry average
- Over the past three years, PAX Global Technology's EPS fell by 12% and over the past three years, the total loss to shareholders 6.2%
PAX Global Technology Limited (HKG:327) has not performed well recently and CEO Jack Lu will probably need to up their game. At the upcoming AGM on 21st of May, shareholders can hear from the board including their plans for turning around performance. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.
Check out our latest analysis for PAX Global Technology
Comparing PAX Global Technology Limited's CEO Compensation With The Industry
According to our data, PAX Global Technology Limited has a market capitalization of HK$5.3b, and paid its CEO total annual compensation worth HK$25m over the year to December 2024. Notably, that's an increase of 36% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$5.6m.
In comparison with other companies in the Hong Kong Electronic industry with market capitalizations ranging from HK$3.1b to HK$12b, the reported median CEO total compensation was HK$4.7m. Hence, we can conclude that Jack Lu is remunerated higher than the industry median. Moreover, Jack Lu also holds HK$44m worth of PAX Global Technology stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | HK$5.6m | HK$5.7m | 23% |
| Other | HK$19m | HK$13m | 77% |
| Total Compensation | HK$25m | HK$18m | 100% |
On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. It's interesting to note that PAX Global Technology allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at PAX Global Technology Limited's Growth Numbers
Over the last three years, PAX Global Technology Limited has shrunk its earnings per share by 12% per year. Its revenue is down 9.9% over the previous year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has PAX Global Technology Limited Been A Good Investment?
With a three year total loss of 6.2% for the shareholders, PAX Global Technology Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. 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.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for PAX Global Technology that investors should think about before committing capital to this stock.
Important note: PAX Global Technology 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. 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.