We Think Sunray Engineering Group Limited's (HKG:8616) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Sunray Engineering Group will host its Annual General Meeting on 20th of August
• Total pay for CEO Peter Lam includes HK$7.89m salary
• Total compensation is 275% above industry average
• Sunray Engineering Group's EPS declined by 120% over the past three years while total shareholder loss over the past three years was 52%

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Sunray Engineering Group Limited (HKG:8616) has not performed well recently and CEO Peter Lam will probably need to up their game. At the upcoming AGM on 20th of August, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Sunray Engineering Group

Comparing Sunray Engineering Group Limited's CEO Compensation With The Industry

Our data indicates that Sunray Engineering Group Limited has a market capitalization of HK$40m, and total annual CEO compensation was reported as HK$9.2m for the year to March 2025. This means that the compensation hasn't changed much from last year. In particular, the salary of HK$7.89m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.5m. Hence, we can conclude that Peter Lam is remunerated higher than the industry median. Moreover, Peter Lam also holds HK$30m worth of Sunray Engineering Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. Our data reveals that Sunray Engineering Group allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Sunray Engineering Group Limited's Growth Numbers

Over the last three years, Sunray Engineering Group Limited has shrunk its earnings per share by 120% per year. It saw its revenue drop 2.1% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Sunray Engineering Group Limited Been A Good Investment?

With a total shareholder return of -52% over three years, Sunray Engineering Group Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Sunray Engineering Group that investors should look into moving forward.

Important note: Sunray Engineering Group 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.