Most Shareholders Will Probably Find That The Compensation For Affluent Foundation Holdings Limited's (HKG:1757) CEO Is Reasonable

Key Insights

• Affluent Foundation Holdings to hold its Annual General Meeting on 13th of August
• CEO Siu Cheong Chan's total compensation includes salary of HK$57.0k
• The overall pay is 39% below the industry average
• Affluent Foundation Holdings' three-year loss to shareholders was 60% while its EPS grew by 55% over the past three years

The performance at Affluent Foundation Holdings Limited (HKG:1757) has been rather lacklustre of late and shareholders may be wondering what CEO Siu Cheong Chan is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 13th of August. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

See our latest analysis for Affluent Foundation Holdings

How Does Total Compensation For Siu Cheong Chan Compare With Other Companies In The Industry?

According to our data, Affluent Foundation Holdings Limited has a market capitalization of HK$194m, and paid its CEO total annual compensation worth HK$1.4m over the year to March 2024. There was no change in the compensation compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$57k.

On comparing similar-sized companies in the Hong Kong Construction industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.2m. That is to say, Siu Cheong Chan is paid under the industry median. What's more, Siu Cheong Chan holds HK$146m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	HK$57k	HK$57k	4%
Other	HK$1.3m	HK$1.3m	96%
Total Compensation	HK$1.4m	HK$1.4m	100%

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. Investors may find it interesting that Affluent Foundation Holdings paid a marginal salary to Siu Cheong Chan, over the past year, focusing on non-salary compensation instead. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Affluent Foundation Holdings Limited's Growth Numbers

Over the past three years, Affluent Foundation Holdings Limited has seen its earnings per share (EPS) grow by 55% per year. Its revenue is down 39% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Affluent Foundation Holdings Limited Been A Good Investment?

Few Affluent Foundation Holdings Limited shareholders would feel satisfied with the return of -60% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Affluent Foundation Holdings prefers rewarding its CEO through non-salary benefits. The fact that shareholders have earned a negative share price return is certainly disconcerting. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company 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 did our research and identified 3 warning signs (and 1 which is concerning) in Affluent Foundation Holdings we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com