Here's Why Shareholders May Want To Be Cautious With Increasing First Shanghai Investments Limited's (HKG:227) CEO Pay Packet

Key Insights

• First Shanghai Investments' Annual General Meeting to take place on 23rd of May
• Salary of HK$4.17m is part of CEO Yuen Yat Lo's total remuneration
• Total compensation is 160% above industry average
• Over the past three years, First Shanghai Investments' EPS grew by 115% and over the past three years, the total shareholder return was 96%

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Performance at First Shanghai Investments Limited (HKG:227) has been reasonably good and CEO Yuen Yat Lo has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 23rd of May. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for First Shanghai Investments

How Does Total Compensation For Yuen Yat Lo Compare With Other Companies In The Industry?

According to our data, First Shanghai Investments Limited has a market capitalization of HK$581m, and paid its CEO total annual compensation worth HK$5.1m over the year to December 2024. That's a modest increase of 3.5% on the prior year. Notably, the salary which is HK$4.17m, represents most of the total compensation being paid.

On comparing similar-sized companies in the Hong Kong Capital Markets industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.9m. This suggests that Yuen Yat Lo is paid more than the median for the industry. Moreover, Yuen Yat Lo also holds HK$76m worth of First Shanghai Investments stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	HK$4.2m	HK$4.2m	83%
Other	HK$883k	HK$726k	17%
Total Compensation	HK$5.1m	HK$4.9m	100%

Talking in terms of the industry, salary represented approximately 86% of total compensation out of all the companies we analyzed, while other remuneration made up 14% of the pie. First Shanghai Investments is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.

First Shanghai Investments Limited's Growth

Over the past three years, First Shanghai Investments Limited has seen its earnings per share (EPS) grow by 115% per year. Its revenue is up 31% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has First Shanghai Investments Limited Been A Good Investment?

Most shareholders would probably be pleased with First Shanghai Investments Limited for providing a total return of 96% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 3 warning signs for First Shanghai Investments that investors should look into moving forward.

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.