Transtech Optelecom Science Holdings Limited's (HKG:9963) CEO Will Probably Find It Hard To See A Huge Raise This Year

Key Insights

• Transtech Optelecom Science Holdings' Annual General Meeting to take place on 3rd of June
• Total pay for CEO Xingfu He includes HK$1.34m salary
• The total compensation is similar to the average for the industry
• Over the past three years, Transtech Optelecom Science Holdings' EPS grew by 1.3% and over the past three years, the total loss to shareholders 66%

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The underwhelming share price performance of Transtech Optelecom Science Holdings Limited (HKG:9963) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 3rd of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Transtech Optelecom Science Holdings

How Does Total Compensation For Xingfu He Compare With Other Companies In The Industry?

According to our data, Transtech Optelecom Science Holdings Limited has a market capitalization of HK$98m, and paid its CEO total annual compensation worth HK$1.7m over the year to December 2024. That is, the compensation was roughly the same as last year. Notably, the salary which is HK$1.34m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Communications industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.6m. From this we gather that Xingfu He is paid around the median for CEOs in the industry.

Talking in terms of the industry, salary represented approximately 66% of total compensation out of all the companies we analyzed, while other remuneration made up 34% of the pie. Transtech Optelecom Science Holdings pays out 78% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Transtech Optelecom Science Holdings Limited's Growth Numbers

Transtech Optelecom Science Holdings Limited's earnings per share (EPS) grew 1.3% per year over the last three years. In the last year, its revenue is down 15%.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Transtech Optelecom Science Holdings Limited Been A Good Investment?

With a total shareholder return of -66% over three years, Transtech Optelecom Science Holdings Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Transtech Optelecom Science Holdings (of which 2 are concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: Transtech Optelecom Science 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.