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Performance at ST International Holdings Company Limited (HKG: 8521) hasn’t been particularly bullish recently, and shareholders will likely hold CEO Bin Xi and the board responsible for that. At the next annual general meeting on May 28, 2021, shareholders may have the opportunity to influence management to review performance by voting on resolutions such as executive compensation and other matters. Based on our analysis below, we believe CEO compensation looks appropriate at this time.
Check out our latest analysis for ST International Holdings
How does Bin Xi’s total compensation compare to other companies in the industry?
According to our data, ST International Holdings Company Limited has a market capitalization of 87 million Hong Kong dollars and paid its CEO a total annual compensation of 1.5 million Hong Kong dollars for the year until December 2020. This is a notable increase of 21% from last year. In particular, the salary of HK $ 1.46 million represents a considerable part of the total compensation paid to the CEO.
Compared with other companies in the industry with market capitalizations of less than HK $ 1.6 billion, the reported median total CEO compensation was HK $ 2.3 million. That is, Bin Xi is paid below the industry median.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | HK $ 1.5 million | HK $ 1.2 million | 98% |
| Other | 23,000 HK $ | HK $ 35,000 | 2% |
| Total compensation | HK $ 1.5 million | HK $ 1.2 million | 100% |
At the industry level, about 93% of total compensation represents salary and 7% other compensation. ST International Holdings focuses on a more traditional approach and pays a higher share of compensation in the form of salary, compared to non-salary benefits. If the total compensation moves towards salary, this suggests that the variable part – which is generally linked to performance, is lower.
A look at the growth figures of ST International Holdings Company Limited
Over the past three years, ST International Holdings Company Limited has reduced its earnings per share by 25% per year. Its turnover is down 30% compared to the previous year.
Overall, this is not a very positive outcome for shareholders. This is made worse by the fact that revenues are actually down from last year. Given this relatively weak performance, shareholders probably wouldn’t want to see high compensation for the CEO. While we don’t have analyst forecasts, you might want to rate this data-rich visualization of earnings, revenue, and cash flow.
Was ST International Holdings Company Limited a good investment?
The -42% three-year return would not have pleased the shareholders of ST International Holdings Company Limited. Therefore, it could be inconvenient for shareholders if the CEO is paid generously.
In summary…
Bin receives almost all of their compensation in the form of salary. Given that shareholders haven’t seen any positive return on their investment, let alone the lack of earnings growth, this may suggest that few of them would be willing to give the CEO a raise. At the next AGM, management will have the opportunity to explain how they plan to get the company back on track and address investor concerns.
CEO compensation is just one of the many factors to consider when reviewing company performance. We did our research and identified 3 warning signs (and 1 which is of concern) in ST International Holdings, we think you should be aware.
Of course, you might find a fantastic investment looking at a different set of stocks. So take a look at this free list of interesting companies.
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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take into account your goals or your financial situation. We aim to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative information. Simply Wall St has no position in the mentioned stocks.
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