This Is Why Holly Futures Co., Ltd.'s (HKG:3678) CEO Can Expect A Bump Up In Their Pay Packet

Key Insights

• Holly Futures' Annual General Meeting to take place on 28th of June
• Total pay for CEO Kairong Chu includes CN¥449.2k salary
• The total compensation is 80% less than the average for the industry
• Over the past three years, Holly Futures' EPS fell by 97% and over the past three years, the total shareholder return was 72%

The decent performance at Holly Futures Co., Ltd. (HKG:3678) recently will please most shareholders as they go into the AGM coming up on 28th of June. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

Check out our latest analysis for Holly Futures

How Does Total Compensation For Kairong Chu Compare With Other Companies In The Industry?

Our data indicates that Holly Futures Co., Ltd. has a market capitalization of HK$6.6b, and total annual CEO compensation was reported as CN¥551k for the year to December 2023. We note that's a decrease of 15% compared to last year. In particular, the salary of CN¥449.2k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Hong Kong Capital Markets industry with market capitalizations ranging from HK$3.1b to HK$12b, the reported median CEO total compensation was CN¥2.8m. That is to say, Kairong Chu is paid under the industry median.

Component	2023	2022	Proportion (2023)
Salary	CN¥449k	CN¥349k	82%
Other	CN¥101k	CN¥300k	18%
Total Compensation	CN¥551k	CN¥649k	100%

Speaking on an industry level, nearly 83% of total compensation represents salary, while the remainder of 17% is other remuneration. Although there is a difference in how total compensation is set, Holly Futures more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Holly Futures Co., Ltd.'s Growth

Holly Futures Co., Ltd. has reduced its earnings per share by 97% a year over the last three years. It achieved revenue growth of 32% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Holly Futures Co., Ltd. Been A Good Investment?

Most shareholders would probably be pleased with Holly Futures Co., Ltd. for providing a total return of 72% 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...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Holly Futures that investors should think about before committing capital to this stock.

Switching gears from Holly Futures, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com