We Discuss Why Dah Sing Financial Holdings Limited's (HKG:440) CEO Compensation May Be Closely Reviewed

Dah Sing Financial Holdings Limited (HKG:440) has not performed well recently and CEO Derek Wong will probably need to up their game. At the upcoming AGM on 02 June 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Dah Sing Financial Holdings

How Does Total Compensation For Derek Wong Compare With Other Companies In The Industry?

At the time of writing, our data shows that Dah Sing Financial Holdings Limited has a market capitalization of HK$8.7b, and reported total annual CEO compensation of HK$12m for the year to December 2020. That's a slight decrease of 3.0% on the prior year. In particular, the salary of HK$8.72m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from HK$3.1b to HK$12b, the reported median CEO total compensation was HK$2.4m. Accordingly, our analysis reveals that Dah Sing Financial Holdings Limited pays Derek Wong north of the industry median.

Component	2020	2019	Proportion (2020)
Salary	HK$8.7m	HK$8.7m	74%
Other	HK$3.0m	HK$3.4m	26%
Total Compensation	HK$12m	HK$12m	100%

Speaking on an industry level, nearly 56% of total compensation represents salary, while the remainder of 44% is other remuneration. According to our research, Dah Sing Financial Holdings has allocated a higher percentage of pay to salary in comparison to the wider industry. 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.

A Look at Dah Sing Financial Holdings Limited's Growth Numbers

Over the last three years, Dah Sing Financial Holdings Limited has shrunk its earnings per share by 8.3% per year. In the last year, its revenue is down 11%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Dah Sing Financial Holdings Limited Been A Good Investment?

With a total shareholder return of -40% over three years, Dah Sing Financial Holdings Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Dah Sing Financial Holdings (1 is a bit unpleasant!) that you should be aware of before investing here.

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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