Shareholders will probably not be too impressed with the underwhelming results at Sunlight (1977) Holdings Limited (HKG:8451) recently. At the upcoming AGM on 08 February 2023, shareholders can hear from the board including their plans for turning around performance. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Sunlight (1977) Holdings

How Does Total Compensation For Liang Sie Chua Compare With Other Companies In The Industry?

Our data indicates that Sunlight (1977) Holdings Limited has a market capitalization of HK$43m, and total annual CEO compensation was reported as S$326k for the year to September 2022. That's a fairly small increase of 7.2% over the previous year. Notably, the salary which is S$234.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the Hong Kong Retail Distributors industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was S$333k. From this we gather that Liang Sie Chua is paid around the median for CEOs in the industry.

On an industry level, around 93% of total compensation represents salary and 7% is other remuneration. It's interesting to note that Sunlight (1977) Holdings allocates a smaller portion of compensation to salary 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.

Sunlight (1977) Holdings Limited's Growth

Over the last three years, Sunlight (1977) Holdings Limited has shrunk its earnings per share by 14% per year. It achieved revenue growth of 2.2% over the last year.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Sunlight (1977) Holdings Limited Been A Good Investment?

Given the total shareholder loss of 26% over three years, many shareholders in Sunlight (1977) Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

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, the board will get the chance to explain the steps it plans to take to improve business performance.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Sunlight (1977) Holdings that investors should be aware of in a dynamic business environment.

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.