Key Insights

• BOSA Technology Holdings will host its Annual General Meeting on 17th of November
• Salary of HK$1.34m is part of CEO K Lim's total remuneration
• The total compensation is 127% higher than the average for the industry
• BOSA Technology Holdings' three-year loss to shareholders was 61% while its EPS grew by 42% over the past three years

In the past three years, the share price of BOSA Technology Holdings Limited (HKG:8140) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 17th of November. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for BOSA Technology Holdings

Comparing BOSA Technology Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that BOSA Technology Holdings Limited has a market capitalization of HK$58m, and reported total annual CEO compensation of HK$4.2m for the year to June 2023. That's a fairly small increase of 7.4% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$1.3m.

On comparing similar-sized companies in the Hong Kong Commercial Services industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.9m. Accordingly, our analysis reveals that BOSA Technology Holdings Limited pays K Lim north of the industry median. What's more, K Lim holds HK$8.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. BOSA 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.

BOSA Technology Holdings Limited's Growth

BOSA Technology Holdings Limited has seen its earnings per share (EPS) increase by 42% a year over the past three years. It saw its revenue drop 2.1% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 BOSA Technology Holdings Limited Been A Good Investment?

With a total shareholder return of -61% over three years, BOSA Technology Holdings Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is significant) in BOSA 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.