Increases to CEO Compensation Might Be Put On Hold For Now at FIT Hon Teng Limited (HKG:6088)

Key Insights

• FIT Hon Teng to hold its Annual General Meeting on 20th of June
• Salary of US$1.26m is part of CEO Sidney Lu Lu's total remuneration
• The overall pay is 962% above the industry average
• FIT Hon Teng's total shareholder return over the past three years was 117% while its EPS grew by 2.1% over the past three years

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Performance at FIT Hon Teng Limited (HKG:6088) has been reasonably good and CEO Sidney Lu Lu has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 20th of June. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for FIT Hon Teng

Comparing FIT Hon Teng Limited's CEO Compensation With The Industry

According to our data, FIT Hon Teng Limited has a market capitalization of HK$16b, and paid its CEO total annual compensation worth US$4.8m over the year to December 2024. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.3m.

On examining similar-sized companies in the Hong Kong Electronic industry with market capitalizations between HK$7.8b and HK$25b, we discovered that the median CEO total compensation of that group was US$448k. This suggests that Sidney Lu Lu is paid more than the median for the industry. Moreover, Sidney Lu Lu also holds HK$976m worth of FIT Hon Teng stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. In FIT Hon Teng's 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.

FIT Hon Teng Limited's Growth

FIT Hon Teng Limited's earnings per share (EPS) grew 2.1% per year over the last three years. In the last year, its revenue is up 6.1%.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has FIT Hon Teng Limited Been A Good Investment?

Most shareholders would probably be pleased with FIT Hon Teng Limited for providing a total return of 117% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for FIT Hon Teng that investors should be aware of in a dynamic business environment.

Switching gears from FIT Hon Teng, 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.