Key Insights

• National Electronics Holdings to hold its Annual General Meeting on 23rd of August
• Salary of HK$3.36m is part of CEO James Lee's total remuneration
• The overall pay is 80% above the industry average
• National Electronics Holdings' three-year loss to shareholders was 36% while its EPS was down 28% over the past three years

In the past three years, the share price of National Electronics Holdings Limited (HKG:213) has struggled to grow and now shareholders are sitting on a loss. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. The AGM coming up on 23rd of August will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

Comparing National Electronics Holdings Limited's CEO Compensation With The Industry

According to our data, National Electronics Holdings Limited has a market capitalization of HK$577m, and paid its CEO total annual compensation worth HK$3.4m over the year to March 2024. Notably, that's a decrease of 44% over the year before. Notably, the salary which is HK$3.36m, represents most of the total compensation being paid.

On comparing similar-sized companies in the Hong Kong Luxury industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.9m. This suggests that James Lee is paid more than the median for the industry.

Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 9% is other remuneration. National Electronics Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

National Electronics Holdings Limited's Growth

National Electronics Holdings Limited has reduced its earnings per share by 28% a year over the last three years. Its revenue is up 15% over the last year.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 National Electronics Holdings Limited Been A Good Investment?

With a total shareholder return of -36% over three years, National Electronics Holdings Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

James receives almost all of their compensation through a salary. The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for National Electronics Holdings you should be aware of, and 2 of them are a bit concerning.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.