Key Insights

• China-Hongkong Photo Products Holdings' Annual General Meeting to take place on 9th of August
• Salary of HK$1.92m is part of CEO Stanley Sun's total remuneration
• The overall pay is 86% above the industry average
• China-Hongkong Photo Products Holdings' EPS declined by 4.0% over the past three years while total shareholder loss over the past three years was 3.7%

The results at China-Hongkong Photo Products Holdings Limited (HKG:1123) have been quite disappointing recently and CEO Stanley Sun bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 9th of August. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Comparing China-Hongkong Photo Products Holdings Limited's CEO Compensation With The Industry

According to our data, China-Hongkong Photo Products Holdings Limited has a market capitalization of HK$158m, and paid its CEO total annual compensation worth HK$3.1m over the year to March 2024. That's a fairly small increase of 3.5% over the previous year. Notably, the salary which is HK$1.92m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Retail Distributors industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.6m. Accordingly, our analysis reveals that China-Hongkong Photo Products Holdings Limited pays Stanley Sun north of the industry median.

Speaking on an industry level, nearly 95% of total compensation represents salary, while the remainder of 5% is other remuneration. In China-Hongkong Photo Products Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader 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.

China-Hongkong Photo Products Holdings Limited's Growth

Over the last three years, China-Hongkong Photo Products Holdings Limited has shrunk its earnings per share by 4.0% per year. In the last year, its revenue is up 2.1%.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has China-Hongkong Photo Products Holdings Limited Been A Good Investment?

With a three year total loss of 3.7% for the shareholders, China-Hongkong Photo Products Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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 compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for China-Hongkong Photo Products Holdings that investors should look into moving forward.

Important note: China-Hongkong Photo Products Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.

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