Shareholders May Be Wary Of Increasing CK Hutchison Holdings Limited's (HKG:1) CEO Compensation Package

Key Insights

• CK Hutchison Holdings' Annual General Meeting to take place on 22nd of May
• CEO Frank Sixt's total compensation includes salary of HK$12.1m
• The total compensation is 550% higher than the average for the industry
• Over the past three years, CK Hutchison Holdings' EPS fell by 20% and over the past three years, the total loss to shareholders 2.6%

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CK Hutchison Holdings Limited (HKG:1) has not performed well recently and CEO Frank Sixt will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 22nd of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for CK Hutchison Holdings

Comparing CK Hutchison Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that CK Hutchison Holdings Limited has a market capitalization of HK$174b, and reported total annual CEO compensation of HK$87m for the year to December 2024. We note that's an increase of 24% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$12m.

For comparison, other companies in the Hong Kong Industrials industry with market capitalizations above HK$62b, reported a median total CEO compensation of HK$13m. This suggests that Frank Sixt is paid more than the median for the industry. Moreover, Frank Sixt also holds HK$7.6m worth of CK Hutchison Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 72% of total compensation represents salary and 28% is other remuneration. CK Hutchison Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

CK Hutchison Holdings Limited's Growth

CK Hutchison Holdings Limited has reduced its earnings per share by 20% a year over the last three years. In the last year, its revenue is up 2.1%.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has CK Hutchison Holdings Limited Been A Good Investment?

Since shareholders would have lost about 2.6% over three years, some CK Hutchison Holdings Limited investors would surely be feeling negative emotions. 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.

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. We've identified 1 warning sign for CK Hutchison Holdings that investors should be aware of in a dynamic business environment.

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.