This Is Why Asia-Pac Financial Investment Company Limited's (HKG:8193) CEO Compensation Looks Appropriate

Key Insights

• Asia-Pac Financial Investment to hold its Annual General Meeting on 25th of September
• Salary of HK$1.26m is part of CEO Kwok Kwong Ip's total remuneration
• The overall pay is 32% below the industry average
• Asia-Pac Financial Investment's three-year loss to shareholders was 60% while its EPS grew by 97% over the past three years

Shareholders may be wondering what CEO Kwok Kwong Ip plans to do to improve the less than great performance at Asia-Pac Financial Investment Company Limited (HKG:8193) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 25th of September. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for Asia-Pac Financial Investment

Comparing Asia-Pac Financial Investment Company Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Asia-Pac Financial Investment Company Limited has a market capitalization of HK$37m, and reported total annual CEO compensation of HK$1.6m for the year to March 2023. We note that's an increase of 24% above last year. In particular, the salary of HK$1.26m, makes up a huge portion of the total compensation being paid to 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$2.4m. Accordingly, Asia-Pac Financial Investment pays its CEO under the industry median. Furthermore, Kwok Kwong Ip directly owns HK$497k worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	HK$1.3m	HK$1.3m	78%
Other	HK$348k	HK$18k	22%
Total Compensation	HK$1.6m	HK$1.3m	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. Asia-Pac Financial Investment is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Asia-Pac Financial Investment Company Limited's Growth

Asia-Pac Financial Investment Company Limited's earnings per share (EPS) grew 97% per year over the last three years. Its revenue is down 33% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Asia-Pac Financial Investment Company Limited Been A Good Investment?

Few Asia-Pac Financial Investment Company Limited shareholders would feel satisfied with the return of -60% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders have earned a negative share price return is certainly disconcerting. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 2 which are a bit unpleasant) in Asia-Pac Financial Investment we think you should know about.

Switching gears from Asia-Pac Financial Investment, 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.