We Think Some Shareholders May Hesitate To Increase Yuxing InfoTech Investment Holdings Limited's (HKG:8005) CEO Compensation

Key Insights

• Yuxing InfoTech Investment Holdings will host its Annual General Meeting on 18th of June
• CEO Yu Cong's total compensation includes salary of HK$3.00m
• The overall pay is 79% above the industry average
• Over the past three years, Yuxing InfoTech Investment Holdings' EPS grew by 36% and over the past three years, the total loss to shareholders 48%

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In the past three years, the share price of Yuxing InfoTech Investment Holdings Limited (HKG:8005) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 18th of June could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Yuxing InfoTech Investment Holdings

Comparing Yuxing InfoTech Investment Holdings Limited's CEO Compensation With The Industry

According to our data, Yuxing InfoTech Investment Holdings Limited has a market capitalization of HK$261m, and paid its CEO total annual compensation worth HK$4.4m over the year to December 2024. We note that's an increase of 38% above last year. In particular, the salary of HK$3.00m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Consumer Durables industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.4m. Hence, we can conclude that Yu Cong is remunerated higher than the industry median.

On an industry level, roughly 75% of total compensation represents salary and 25% is other remuneration. Yuxing InfoTech Investment Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.

Yuxing InfoTech Investment Holdings Limited's Growth

Over the past three years, Yuxing InfoTech Investment Holdings Limited has seen its earnings per share (EPS) grow by 36% per year. Its revenue is down 1.8% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Yuxing InfoTech Investment Holdings Limited Been A Good Investment?

The return of -48% over three years would not have pleased Yuxing InfoTech Investment Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too 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. Shareholders would be keen to know what's holding the stock back when earnings have grown. 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 compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in Yuxing InfoTech Investment Holdings we think you should know about.

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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.