Key Insights

• Karin Technology Holdings' Annual General Meeting to take place on 30th of October
• Salary of HK$2.14m is part of CEO Michael Ng's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Karin Technology Holdings' EPS fell by 17% and over the past three years, the total shareholder return was 37%

Despite strong share price growth of 37% for Karin Technology Holdings Limited (SGX:K29) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 30th of October. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

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

According to our data, Karin Technology Holdings Limited has a market capitalization of S$68m, and paid its CEO total annual compensation worth HK$2.5m over the year to June 2024. Notably, that's an increase of 13% over the year before. In particular, the salary of HK$2.14m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Singapore Electronic industry with market capitalizations under S$264m, the reported median total CEO compensation was HK$3.0m. So it looks like Karin Technology Holdings compensates Michael Ng in line with the median for the industry.

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. Karin Technology Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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.

A Look at Karin Technology Holdings Limited's Growth Numbers

Karin Technology Holdings Limited has reduced its earnings per share by 17% a year over the last three years. It achieved revenue growth of 8.0% over the last year.

Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Karin Technology Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 37% over three years, Karin Technology Holdings Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company's remuneration policies and evaluate if the board's judgement and decision-making is aligned with that of the company's shareholders.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Karin Technology Holdings that investors should think about before committing capital to this stock.

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.