Here's Why Shareholders May Want To Be Cautious With Increasing Future Bright Holdings Limited's (HKG:703) CEO Pay Packet

Key Insights

• Future Bright Holdings will host its Annual General Meeting on 6th of June
• Total pay for CEO Chak Mo Chan includes HK$482.0k salary
• Total compensation is 180% above industry average
• Future Bright Holdings' total shareholder return over the past three years was 54% while its EPS grew by 48% over the past three years

Under the guidance of CEO Chak Mo Chan, Future Bright Holdings Limited (HKG:703) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 6th of June. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Future Bright Holdings

Comparing Future Bright Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Future Bright Holdings Limited has a market capitalization of HK$191m, and reported total annual CEO compensation of HK$5.9m for the year to December 2023. That's slightly lower by 3.7% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$482k.

On comparing similar-sized companies in the Hong Kong Hospitality industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$2.1m. This suggests that Chak Mo Chan is paid more than the median for the industry. Moreover, Chak Mo Chan also holds HK$77m worth of Future Bright Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	HK$482k	HK$632k	8%
Other	HK$5.4m	HK$5.5m	92%
Total Compensation	HK$5.9m	HK$6.1m	100%

Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. Future Bright Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Future Bright Holdings Limited's Growth Numbers

Future Bright Holdings Limited's earnings per share (EPS) grew 48% per year over the last three years. In the last year, its revenue is up 72%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Future Bright Holdings Limited Been A Good Investment?

We think that the total shareholder return of 54%, over three years, would leave most Future Bright Holdings 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.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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 2 warning signs for Future Bright Holdings that investors should be aware of in a dynamic business environment.

Switching gears from Future Bright Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.