Key Insights

• Shun Tak Holdings will host its Annual General Meeting on 5th of June
• CEO Pansy Catilina Ho's total compensation includes salary of HK$7.25m
• Total compensation is 123% above industry average
• Shun Tak Holdings' EPS declined by 93% over the past three years while total shareholder loss over the past three years was 67%

The underwhelming share price performance of Shun Tak Holdings Limited (HKG:242) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. The AGM coming up on 5th of June 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. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

Comparing Shun Tak Holdings Limited's CEO Compensation With The Industry

Our data indicates that Shun Tak Holdings Limited has a market capitalization of HK$2.4b, and total annual CEO compensation was reported as HK$7.7m for the year to December 2023. This means that the compensation hasn't changed much from last year. In particular, the salary of HK$7.25m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Real Estate industry with market capitalizations ranging from HK$1.6b to HK$6.2b, the reported median CEO total compensation was HK$3.4m. This suggests that Pansy Catilina Ho is paid more than the median for the industry. Moreover, Pansy Catilina Ho also holds HK$453m worth of Shun Tak Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. According to our research, Shun Tak Holdings has allocated a higher percentage of pay to salary in comparison to the wider industry. 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.

A Look at Shun Tak Holdings Limited's Growth Numbers

Over the last three years, Shun Tak Holdings Limited has shrunk its earnings per share by 93% per year. Its revenue is up 21% over the last year.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Shun Tak Holdings Limited Been A Good Investment?

Few Shun Tak Holdings Limited shareholders would feel satisfied with the return of -67% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Shun Tak Holdings that investors should think about before committing capital to this stock.

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.

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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.