Astrum Financial Holdings Limited's (HKG:8333) CEO Might Not Expect Shareholders To Be So Generous This Year

Astrum Financial Holdings Limited (HKG:8333) has not performed well recently and CEO Jackie Pan will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 18 June 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Astrum Financial Holdings

Comparing Astrum Financial Holdings Limited's CEO Compensation With the industry

At the time of writing, our data shows that Astrum Financial Holdings Limited has a market capitalization of HK$140m, and reported total annual CEO compensation of HK$2.7m for the year to December 2020. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is HK$2.47m, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.9m. This suggests that Jackie Pan is paid more than the median for the industry. Moreover, Jackie Pan also holds HK$78m worth of Astrum Financial Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	HK$2.5m	HK$2.4m	92%
Other	HK$220k	HK$220k	8%
Total Compensation	HK$2.7m	HK$2.6m	100%

Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. Although there is a difference in how total compensation is set, Astrum Financial Holdings more or less reflects the market in terms of setting the salary. 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 Astrum Financial Holdings Limited's Growth Numbers

Over the last three years, Astrum Financial Holdings Limited has shrunk its earnings per share by 45% per year. It saw its revenue drop 12% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Astrum Financial Holdings Limited Been A Good Investment?

With a total shareholder return of -30% over three years, Astrum Financial Holdings Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 1 which is a bit concerning) in Astrum Financial Holdings we think you should know about.

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. 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.
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