A Quick Analysis On Hong Kong Finance Group's (HKG:1273) CEO Compensation

This article will reflect on the compensation paid to Dickson Tse who has served as CEO of Hong Kong Finance Group Limited (HKG:1273) since 2013. This analysis will also assess whether Hong Kong Finance Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Hong Kong Finance Group

How Does Total Compensation For Dickson Tse Compare With Other Companies In The Industry?

According to our data, Hong Kong Finance Group Limited has a market capitalization of HK$183m, and paid its CEO total annual compensation worth HK$1.8m over the year to March 2020. That's a modest increase of 4.0% on the prior year. We note that the salary portion, which stands at HK$1.31m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$465k. This suggests that Dickson Tse is paid more than the median for the industry.

Speaking on an industry level, nearly 92% of total compensation represents salary, while the remainder of 7.7% is other remuneration. Hong Kong Finance Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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 Hong Kong Finance Group Limited's Growth Numbers

Hong Kong Finance Group Limited has seen its earnings per share (EPS) increase by 11% a year over the past three years. In the last year, its revenue is up 3.5%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Hong Kong Finance Group Limited Been A Good Investment?

With a three year total loss of 33% for the shareholders, Hong Kong Finance Group Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we noted earlier, Hong Kong Finance Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company has impressed with its EPS growth, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we'd stop short of calling it inappropriate, we think Dickson is earning a very handsome sum.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Hong Kong Finance Group that you should be aware of before investing.

Important note: Hong Kong Finance 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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