The underwhelming share price performance of ECI Technology Holdings Limited (HKG:8013) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 18 January 2023. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for ECI Technology Holdings

Comparing ECI Technology Holdings Limited's CEO Compensation With The Industry

Our data indicates that ECI Technology Holdings Limited has a market capitalization of HK$53m, and total annual CEO compensation was reported as HK$1.4m for the year to August 2022. There was no change in the compensation compared to last year. We note that the salary portion, which stands at HK$1.32m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Hong Kong Commercial Services industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.8m. From this we gather that Tai Wing Ng is paid around the median for CEOs in the industry. Moreover, Tai Wing Ng also holds HK$29m worth of ECI Technology Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 75% of total compensation out of all the companies we analyzed, while other remuneration made up 25% of the pie. Investors will find it interesting that ECI Technology Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ECI Technology Holdings Limited's Growth

ECI Technology Holdings Limited has seen its earnings per share (EPS) increase by 93% a year over the past three years. In the last year, its revenue is down 5.6%.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has ECI Technology Holdings Limited Been A Good Investment?

Few ECI Technology Holdings Limited shareholders would feel satisfied with the return of -66% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

ECI Technology Holdings pays its CEO a majority of compensation through a salary. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

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. In our study, we found 2 warning signs for ECI Technology Holdings you should be aware of, and 1 of them is concerning.

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.