Key Insights

• Sino-Entertainment Technology Holdings to hold its Annual General Meeting on 14th of June
• CEO Tao Li's total compensation includes salary of CN¥46.0k
• Total compensation is 50% below industry average
• Sino-Entertainment Technology Holdings' three-year loss to shareholders was 90% while its EPS was down 105% over the past three years

Performance at Sino-Entertainment Technology Holdings Limited (HKG:6933) has not been particularly rosy recently and shareholders will likely be holding CEO Tao Li and the board accountable for this. At the upcoming AGM on 14th of June, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.

How Does Total Compensation For Tao Li Compare With Other Companies In The Industry?

According to our data, Sino-Entertainment Technology Holdings Limited has a market capitalization of HK$87m, and paid its CEO total annual compensation worth CN¥609k over the year to December 2023. That's a notable increase of 31% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CN¥46k.

For comparison, other companies in the Hong Kong Entertainment industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of CN¥1.2m. This suggests that Tao Li is paid below the industry median. Moreover, Tao Li also holds HK$25k worth of Sino-Entertainment Technology 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 89% of total compensation represents salary, while the remainder of 11% is other remuneration. Sino-Entertainment Technology Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Sino-Entertainment Technology Holdings Limited's Growth Numbers

Over the last three years, Sino-Entertainment Technology Holdings Limited has shrunk its earnings per share by 105% per year. In the last year, its revenue is down 27%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Sino-Entertainment Technology Holdings Limited Been A Good Investment?

Few Sino-Entertainment Technology Holdings Limited shareholders would feel satisfied with the return of -90% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 1 which doesn't sit too well with us) in Sino-Entertainment Technology Holdings we think you should know about.

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.