We Think Shareholders Are Less Likely To Approve A Large Pay Rise For FSE Lifestyle Services Limited's (HKG:331) CEO For Now

Key Insights

• FSE Lifestyle Services will host its Annual General Meeting on 20th of November
• Salary of HK$4.12m is part of CEO Rocky Poon's total remuneration
• Total compensation is 32% above industry average
• FSE Lifestyle Services' total shareholder return over the past three years was 109% while its EPS grew by 8.1% over the past three years

Under the guidance of CEO Rocky Poon, FSE Lifestyle Services Limited (HKG:331) has performed reasonably well recently. As shareholders go into the upcoming AGM on 20th of November, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for FSE Lifestyle Services

How Does Total Compensation For Rocky Poon Compare With Other Companies In The Industry?

At the time of writing, our data shows that FSE Lifestyle Services Limited has a market capitalization of HK$2.7b, and reported total annual CEO compensation of HK$6.2m for the year to June 2023. That's a modest increase of 3.1% on the prior year. In particular, the salary of HK$4.12m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Construction industry with market capitalizations ranging between HK$1.6b and HK$6.2b had a median total CEO compensation of HK$4.7m. Accordingly, our analysis reveals that FSE Lifestyle Services Limited pays Rocky Poon north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	HK$4.1m	HK$4.0m	67%
Other	HK$2.1m	HK$2.0m	33%
Total Compensation	HK$6.2m	HK$6.0m	100%

Speaking on an industry level, nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. It's interesting to note that FSE Lifestyle Services allocates a smaller portion of compensation to salary in comparison to the broader 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.

FSE Lifestyle Services Limited's Growth

FSE Lifestyle Services Limited has seen its earnings per share (EPS) increase by 8.1% a year over the past three years. Its revenue is up 11% over the last year.

We think the revenue growth is good. And the improvement in EPSis modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has FSE Lifestyle Services Limited Been A Good Investment?

We think that the total shareholder return of 109%, over three years, would leave most FSE Lifestyle Services Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for FSE Lifestyle Services you should be aware of, and 1 of them is potentially serious.

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.