Here's Why Shareholders May Want To Be Cautious With Increasing Astrum Financial Holdings Limited's (HKG:8333) CEO Pay Packet

Key Insights

• Astrum Financial Holdings to hold its Annual General Meeting on 23rd of May
• Salary of HK$3.18m is part of CEO Jackie Pan's total remuneration
• Total compensation is 65% above industry average
• Over the past three years, Astrum Financial Holdings' EPS grew by 2.6% and over the past three years, the total loss to shareholders 68%

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Shareholders of Astrum Financial Holdings Limited (HKG:8333) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 23rd of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Astrum Financial Holdings

Comparing Astrum Financial Holdings Limited's CEO Compensation With The Industry

Our data indicates that Astrum Financial Holdings Limited has a market capitalization of HK$31m, and total annual CEO compensation was reported as HK$3.2m for the year to December 2024. Notably, that's an increase of 15% over the year before. In particular, the salary of HK$3.18m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Capital Markets industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.9m. Accordingly, our analysis reveals that Astrum Financial Holdings Limited pays Jackie Pan north of the industry median. Furthermore, Jackie Pan directly owns HK$17m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	HK$3.2m	HK$2.8m	99%
Other	HK$18k	HK$18k	1%
Total Compensation	HK$3.2m	HK$2.8m	100%

On an industry level, around 86% of total compensation represents salary and 14% is other remuneration. Astrum Financial Holdings has gone down a largely traditional route, paying Jackie Pan a high salary, giving it preference over non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Astrum Financial Holdings Limited's Growth Numbers

Over the past three years, Astrum Financial Holdings Limited has seen its earnings per share (EPS) grow by 2.6% per year. Its revenue is down 45% over the previous year.

We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one 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 Astrum Financial Holdings Limited Been A Good Investment?

With a total shareholder return of -68% 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.

To Conclude...

Astrum Financial Holdings pays its CEO a majority of 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. Shareholders would be keen to know what's holding the stock back when earnings have grown. 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. We identified 4 warning signs for Astrum Financial Holdings (3 are concerning!) that you should be aware of before investing here.

Important note: Astrum 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.