Key Insights

• UTS Marketing Solutions Holdings will host its Annual General Meeting on 26th of June
• Total pay for CEO Koon Lee includes RM1.06m salary
• The overall pay is comparable to the industry average
• UTS Marketing Solutions Holdings' EPS declined by 14% over the past three years while total shareholder return over the past three years was 6.8%

The share price of UTS Marketing Solutions Holdings Limited (HKG:6113) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 26th of June. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

How Does Total Compensation For Koon Lee Compare With Other Companies In The Industry?

At the time of writing, our data shows that UTS Marketing Solutions Holdings Limited has a market capitalization of HK$380m, and reported total annual CEO compensation of RM1.4m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at RM1.06m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Professional Services industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of RM1.1m. So it looks like UTS Marketing Solutions Holdings compensates Koon Lee in line with the median for the industry. Moreover, Koon Lee also holds HK$67m worth of UTS Marketing Solutions 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. UTS Marketing Solutions Holdings sets aside a smaller share of compensation for salary, in comparison to the overall 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.

UTS Marketing Solutions Holdings Limited's Growth

UTS Marketing Solutions Holdings Limited has reduced its earnings per share by 14% a year over the last three years. In the last year, its revenue is up 8.5%.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has UTS Marketing Solutions Holdings Limited Been A Good Investment?

With a total shareholder return of 6.8% over three years, UTS Marketing Solutions Holdings Limited has done okay by shareholders, but there's always room for improvement. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for UTS Marketing Solutions Holdings you should be aware of, and 1 of them doesn't sit too well with us.

Switching gears from UTS Marketing Solutions 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com