Why We Think Bright Smart Securities & Commodities Group Limited's (HKG:1428) CEO Compensation Is Not Excessive At All

Key Insights

• Bright Smart Securities & Commodities Group to hold its Annual General Meeting on 19th of August
• Total pay for CEO Edmond Hui includes HK$3.01m salary
• Total compensation is similar to the industry average
• Bright Smart Securities & Commodities Group's EPS declined by 7.4% over the past three years while total shareholder return over the past three years was 148%

The share price of Bright Smart Securities & Commodities Group Limited (HKG:1428) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. Some of these issues will occupy shareholders' minds as the AGM rolls around on 19th of August. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for Bright Smart Securities & Commodities Group

How Does Total Compensation For Edmond Hui Compare With Other Companies In The Industry?

According to our data, Bright Smart Securities & Commodities Group Limited has a market capitalization of HK$3.2b, and paid its CEO total annual compensation worth HK$4.7m over the year to March 2024. That's a notable increase of 20% on last year. Notably, the salary which is HK$3.01m, represents most of the total compensation being paid.

In comparison with other companies in the Hong Kong Capital Markets industry with market capitalizations ranging from HK$1.6b to HK$6.2b, the reported median CEO total compensation was HK$3.7m. This suggests that Bright Smart Securities & Commodities Group remunerates its CEO largely in line with the industry average. What's more, Edmond Hui holds HK$1.1m worth of shares in the company in their own name.

Component	2024	2023	Proportion (2024)
Salary	HK$3.0m	HK$2.5m	64%
Other	HK$1.7m	HK$1.4m	36%
Total Compensation	HK$4.7m	HK$3.9m	100%

Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. Bright Smart Securities & Commodities Group pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Bright Smart Securities & Commodities Group Limited's Growth Numbers

Over the last three years, Bright Smart Securities & Commodities Group Limited has shrunk its earnings per share by 7.4% per year. Its revenue is down 9.8% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Bright Smart Securities & Commodities Group Limited Been A Good Investment?

We think that the total shareholder return of 148%, over three years, would leave most Bright Smart Securities & Commodities Group 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...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Bright Smart Securities & Commodities Group that you should be aware of before investing.

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.