Key Insights

• InvesTech Holdings will host its Annual General Meeting on 31st of May
• CEO Ringo Chan's total compensation includes salary of CN¥2.87m
• The overall pay is 91% above the industry average
• Over the past three years, InvesTech Holdings' EPS grew by 29% and over the past three years, the total loss to shareholders 79%

The underwhelming share price performance of InvesTech Holdings Limited (HKG:1087) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 31st of May. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

How Does Total Compensation For Ringo Chan Compare With Other Companies In The Industry?

Our data indicates that InvesTech Holdings Limited has a market capitalization of HK$68m, and total annual CEO compensation was reported as CN¥3.0m for the year to December 2023. That's a notable decrease of 20% on last year. Notably, the salary which is CN¥2.87m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Communications industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.6m. This suggests that Ringo Chan is paid more than the median for the industry. Moreover, Ringo Chan also holds HK$1.8m worth of InvesTech Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. InvesTech Holdings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

InvesTech Holdings Limited's Growth

InvesTech Holdings Limited has seen its earnings per share (EPS) increase by 29% a year over the past three years. Revenue was pretty flat on last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 InvesTech Holdings Limited Been A Good Investment?

With a total shareholder return of -79% over three years, InvesTech Holdings Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

InvesTech 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. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 3 warning signs for InvesTech Holdings that investors should look into moving forward.

Switching gears from InvesTech Holdings, 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.