Here's Why It's Unlikely That Tongda Group Holdings Limited's (HKG:698) CEO Will See A Pay Rise This Year

Key Insights

• Tongda Group Holdings will host its Annual General Meeting on 29th of May
• Salary of HK$360.0k is part of CEO Ya Nan Wang's total remuneration
• Total compensation is similar to the industry average
• Tongda Group Holdings' EPS declined by 83% over the past three years while total shareholder loss over the past three years was 84%

The results at Tongda Group Holdings Limited (HKG:698) have been quite disappointing recently and CEO Ya Nan Wang bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 29th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Tongda Group Holdings

How Does Total Compensation For Ya Nan Wang Compare With Other Companies In The Industry?

At the time of writing, our data shows that Tongda Group Holdings Limited has a market capitalization of HK$837m, and reported total annual CEO compensation of HK$1.8m for the year to December 2023. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$360k.

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. This suggests that Tongda Group Holdings remunerates its CEO largely in line with the industry average. Furthermore, Ya Nan Wang directly owns HK$98m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	HK$360k	HK$360k	20%
Other	HK$1.5m	HK$1.5m	80%
Total Compensation	HK$1.8m	HK$1.9m	100%

Talking in terms of the industry, salary represented approximately 79% of total compensation out of all the companies we analyzed, while other remuneration made up 21% of the pie. It's interesting to note that Tongda Group Holdings 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.

Tongda Group Holdings Limited's Growth

Over the last three years, Tongda Group Holdings Limited has shrunk its earnings per share by 83% per year. Its revenue is down 18% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Tongda Group Holdings Limited Been A Good Investment?

Few Tongda Group Holdings Limited shareholders would feel satisfied with the return of -84% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

Shareholders may want to check for free if Tongda Group Holdings insiders are buying or selling shares.

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.