Key Insights

• Solargiga Energy Holdings to hold its Annual General Meeting on 12th of June
• Total pay for CEO Xin Tan includes CN¥1.62m salary
• The total compensation is similar to the average for the industry
• Solargiga Energy Holdings' EPS grew by 7.1% over the past three years while total shareholder loss over the past three years was 55%

Shareholders of Solargiga Energy Holdings Limited (HKG:757) will have been dismayed by the negative share price return over the last three years. 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 12th of June. 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.

Comparing Solargiga Energy Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Solargiga Energy Holdings Limited has a market capitalization of HK$455m, and reported total annual CEO compensation of CN¥1.6m for the year to December 2023. That's a notable increase of 8.4% on last year. In particular, the salary of CN¥1.62m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Semiconductor industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥2.1m. So it looks like Solargiga Energy Holdings compensates Xin Tan in line with the median for the industry. Furthermore, Xin Tan directly owns HK$5.7m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 78% of total compensation represents salary and 22% is other remuneration. Investors will find it interesting that Solargiga Energy 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.

A Look at Solargiga Energy Holdings Limited's Growth Numbers

Solargiga Energy Holdings Limited's earnings per share (EPS) grew 7.1% per year over the last three years. Its revenue is up 4.7% over the last year.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 Solargiga Energy Holdings Limited Been A Good Investment?

With a total shareholder return of -55% over three years, Solargiga Energy Holdings Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Xin receives almost all of their compensation through a salary. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. 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. Shareholders would be keen to know what's holding the stock back when earnings have grown. 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 an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Solargiga Energy Holdings (2 are a bit concerning!) that you should be aware of before investing here.

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.