Shareholders May Not Be So Generous With Dah Sing Financial Holdings Limited's (HKG:440) CEO Compensation And Here's Why

Key Insights

• Dah Sing Financial Holdings to hold its Annual General Meeting on 31st of May
• CEO Derek Wong's total compensation includes salary of HK$8.72m
• The overall pay is 643% above the industry average
• Over the past three years, Dah Sing Financial Holdings' EPS grew by 11% and over the past three years, the total loss to shareholders 1.8%

In the past three years, shareholders of Dah Sing Financial Holdings Limited (HKG:440) have seen a loss on their investment. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 31st of May. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Dah Sing Financial Holdings

Comparing Dah Sing Financial Holdings Limited's CEO Compensation With The Industry

According to our data, Dah Sing Financial Holdings Limited has a market capitalization of HK$7.5b, and paid its CEO total annual compensation worth HK$12m over the year to December 2023. That is, the compensation was roughly the same as last year. In particular, the salary of HK$8.72m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Banks industry with market capitalizations ranging between HK$3.1b and HK$13b had a median total CEO compensation of HK$1.6m. Accordingly, our analysis reveals that Dah Sing Financial Holdings Limited pays Derek Wong north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	HK$8.7m	HK$8.7m	73%
Other	HK$3.3m	HK$3.1m	27%
Total Compensation	HK$12m	HK$12m	100%

On an industry level, roughly 63% of total compensation represents salary and 37% is other remuneration. Dah Sing Financial Holdings pays out 73% of remuneration in the form of a salary, significantly higher than the industry average. 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.

Dah Sing Financial Holdings Limited's Growth

Over the past three years, Dah Sing Financial Holdings Limited has seen its earnings per share (EPS) grow by 11% per year. Its revenue is up 10% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Dah Sing Financial Holdings Limited Been A Good Investment?

With a three year total loss of 1.8% for the shareholders, Dah Sing Financial Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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 1 warning sign for Dah Sing Financial Holdings that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.