The disappointing performance at Hudson Investment Group Limited (ASX:HGL) will make some shareholders rather disheartened. At the upcoming AGM on 18 May 2021, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.
Comparing Hudson Investment Group Limited's CEO Compensation With the industry
According to our data, Hudson Investment Group Limited has a market capitalization of AU$18m, and paid its CEO total annual compensation worth AU$150k over the year to December 2020. That's a notable decrease of 29% on last year. Notably, the salary of AU$150k is the entirety of the CEO compensation.
On comparing similar-sized companies in the industry with market capitalizations below AU$254m, we found that the median total CEO compensation was AU$487k. Accordingly, Hudson Investment Group pays its CEO under the industry median.
Speaking on an industry level, nearly 81% of total compensation represents salary, while the remainder of 19% is other remuneration. On a company level, Hudson Investment Group prefers to reward its CEO through a salary, opting not to pay Alan Beasley through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Hudson Investment Group Limited's Growth
Hudson Investment Group Limited has reduced its earnings per share by 71% a year over the last three years. Its revenue is up 3.1% 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. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Hudson Investment Group Limited Been A Good Investment?
Given the total shareholder loss of 26% over three years, many shareholders in Hudson Investment Group Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
Hudson Investment Group pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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, the board will get the chance to explain the steps it plans to take to improve business performance.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for Hudson Investment Group (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.
Important note: Hudson Investment 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.
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This article by Simply Wall St is general in nature. 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.
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