How Much Did Hong Kong Finance Group's (HKG:1273) CEO Pocket Last Year?

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.

Check out our latest analysis for Hong Kong Finance Group

Comparing Hong Kong Finance Group Limited's CEO Compensation With the industry

At the time of writing, our data shows that Hong Kong Finance Group Limited has a market capitalization of HK$156m, and reported total annual CEO compensation of HK$1.8m for 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$505k. Hence, we can conclude that Dickson Tse is remunerated higher than the industry median.

Talking in terms of the industry, salary represented approximately 79% of total compensation out of all the companies we analyzed, while other remuneration made up 21% of the pie. Our data reveals that Hong Kong Finance 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 Hong Kong Finance Group Limited's Growth Numbers

Over the past three years, Hong Kong Finance Group Limited has seen its earnings per share (EPS) grow by 6.2% per year. In the last year, its revenue is up 7.6%.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 49% for the shareholders, Hong Kong Finance Group Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, Hong Kong Finance Group Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. While we have not been overly impressed by the business performance, the shareholder returns have been utterly depressing, over the last three years. And the situation doesn't look all that good when you see Dickson is remunerated higher than the industry average. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Hong Kong Finance Group that investors should be aware of in a dynamic business environment.

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. 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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