It's Unlikely That Hampton Financial Corporation's (CVE:HFC) CEO Will See A Huge Pay Rise This Year

Key Insights

• Hampton Financial will host its Annual General Meeting on 21st of February
• CEO Peter Deeb's total compensation includes salary of CA$300.0k
• The overall pay is 251% above the industry average
• Over the past three years, Hampton Financial's EPS fell by 35% and over the past three years, the total shareholder return was 57%

Hampton Financial Corporation (CVE:HFC) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 21st of February. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for Hampton Financial

Comparing Hampton Financial Corporation's CEO Compensation With The Industry

According to our data, Hampton Financial Corporation has a market capitalization of CA$19m, and paid its CEO total annual compensation worth CA$618k over the year to August 2023. Notably, that's a decrease of 53% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$300k.

On comparing similar-sized companies in the Canadian Capital Markets industry with market capitalizations below CA$271m, we found that the median total CEO compensation was CA$176k. Hence, we can conclude that Peter Deeb is remunerated higher than the industry median. Moreover, Peter Deeb also holds CA$9.5m worth of Hampton Financial stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	CA$300k	CA$265k	49%
Other	CA$318k	CA$1.1m	51%
Total Compensation	CA$618k	CA$1.3m	100%

Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. Hampton Financial sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Hampton Financial Corporation's Growth

Over the last three years, Hampton Financial Corporation has shrunk its earnings per share by 35% per year. Its revenue is down 42% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Hampton Financial Corporation Been A Good Investment?

Boasting a total shareholder return of 57% over three years, Hampton Financial Corporation 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...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. 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.

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 6 warning signs for Hampton Financial (of which 3 can't be ignored!) that you should know about in order to have a holistic understanding of the 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.

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.