Why We Think Fu Shek Financial Holdings Limited's (HKG:2263) CEO Compensation Is Not Excessive At All

Key Insights

• Fu Shek Financial Holdings will host its Annual General Meeting on 16th of September
• Salary of HK$822.0k is part of CEO Man Chiu Sy's total remuneration
• Total compensation is 37% below industry average
• Over the past three years, Fu Shek Financial Holdings' EPS fell by 31% and over the past three years, the total loss to shareholders 10.0%

Shareholders may be wondering what CEO Man Chiu Sy plans to do to improve the less than great performance at Fu Shek Financial Holdings Limited (HKG:2263) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 16th of September. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

See our latest analysis for Fu Shek Financial Holdings

How Does Total Compensation For Man Chiu Sy Compare With Other Companies In The Industry?

According to our data, Fu Shek Financial Holdings Limited has a market capitalization of HK$171m, and paid its CEO total annual compensation worth HK$1.2m over the year to March 2024. That's a notable decrease of 17% on last year. We note that the salary portion, which stands at HK$822.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Hong Kong Capital Markets industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$2.0m. This suggests that Man Chiu Sy is paid below the industry median.

Component	2024	2023	Proportion (2024)
Salary	HK$822k	HK$822k	67%
Other	HK$397k	HK$651k	33%
Total Compensation	HK$1.2m	HK$1.5m	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. Fu Shek Financial Holdings sets aside a smaller share of compensation for salary, in comparison to the overall 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.

A Look at Fu Shek Financial Holdings Limited's Growth Numbers

Over the last three years, Fu Shek Financial Holdings Limited has shrunk its earnings per share by 31% per year. Its revenue is up 25% over the last year.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Fu Shek Financial Holdings Limited Been A Good Investment?

Given the total shareholder loss of 10.0% over three years, many shareholders in Fu Shek Financial Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The lack of share price growth will be weighing on shareholders' minds as they go into the AGM. It may be to do with the fact that earnings have not grown at all in the last few years. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board and assess if the board's plan is likely to improve company performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Fu Shek Financial Holdings (1 is concerning!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.