South China Financial Holdings Limited's (HKG:619) CEO Will Probably Find It Hard To See A Huge Raise This Year

Key Insights

• South China Financial Holdings' Annual General Meeting to take place on 27th of June
• CEO Jessica Ng's total compensation includes salary of HK$2.40m
• The overall pay is comparable to the industry average
• Over the past three years, South China Financial Holdings' EPS grew by 9.6% and over the past three years, the total loss to shareholders 41%

The underwhelming share price performance of South China Financial Holdings Limited (HKG:619) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 27th of June could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for South China Financial Holdings

How Does Total Compensation For Jessica Ng Compare With Other Companies In The Industry?

According to our data, South China Financial Holdings Limited has a market capitalization of HK$90m, and paid its CEO total annual compensation worth HK$2.4m over the year to December 2023. That's a notable decrease of 19% on last year. We note that the salary portion, which stands at HK$2.40m constitutes the majority of total compensation received by the CEO.

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$2.1m. This suggests that South China Financial Holdings remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	HK$2.4m	HK$2.4m	99%
Other	HK$28k	HK$587k	1%
Total Compensation	HK$2.4m	HK$3.0m	100%

On an industry level, roughly 83% of total compensation represents salary and 17% is other remuneration. South China Financial Holdings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

South China Financial Holdings Limited's Growth

South China Financial Holdings Limited's earnings per share (EPS) grew 9.6% per year over the last three years. It achieved revenue growth of 31% over the last year.

It's hard to interpret the strong revenue growth as anything other than a positive. With that in mind, the modestly improving EPS seems positive. We wouldn't say this is necessarily top notch growth, but it is certainly promising. 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 South China Financial Holdings Limited Been A Good Investment?

Few South China Financial Holdings Limited shareholders would feel satisfied with the return of -41% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Jessica receives almost all of their compensation through a salary. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for South China Financial Holdings you should be aware of, and 1 of them can't be ignored.

Important note: South China Financial Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.

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