Key Insights

• Telecom Service One Holdings will host its Annual General Meeting on 20th of September
• Total pay for CEO Sunny Cheung includes HK$432.0k salary
• The total compensation is 71% less than the average for the industry
• Over the past three years, Telecom Service One Holdings' EPS fell by 103% and over the past three years, the total loss to shareholders 64%

Performance at Telecom Service One Holdings Limited (HKG:3997) has not been particularly rosy recently and shareholders will likely be holding CEO Sunny Cheung and the board accountable for this. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 20th of September. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

How Does Total Compensation For Sunny Cheung Compare With Other Companies In The Industry?

At the time of writing, our data shows that Telecom Service One Holdings Limited has a market capitalization of HK$52m, and reported total annual CEO compensation of HK$530k for the year to March 2024. We note that's an increase of 8.2% above last year. In particular, the salary of HK$432.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Commercial Services industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.8m. This suggests that Sunny Cheung is paid below the industry median. Moreover, Sunny Cheung also holds HK$3.5m worth of Telecom Service One 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 81% of total compensation represents salary and 19% is other remuneration. Our data reveals that Telecom Service One Holdings allocates salary more or less in line with the wider market. 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 Telecom Service One Holdings Limited's Growth Numbers

Telecom Service One Holdings Limited has reduced its earnings per share by 103% a year over the last three years. Its revenue is up 5.9% over the last year.

The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Telecom Service One Holdings Limited Been A Good Investment?

Few Telecom Service One Holdings Limited shareholders would feel satisfied with the return of -64% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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 3 warning signs for Telecom Service One Holdings you should be aware of, and 2 of them can't be ignored.

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.