Most Shareholders Will Probably Agree With Victory Securities (Holdings) Company Limited's (HKG:8540) CEO Compensation

Key Insights

• Victory Securities (Holdings)'s Annual General Meeting to take place on 30th of May
• Salary of HK$1.99m is part of CEO Kuen Kou's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Victory Securities (Holdings)'s EPS fell by 106% and over the past three years, the total shareholder return was 71%

Victory Securities (Holdings) Company Limited (HKG:8540) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 30th of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for Victory Securities (Holdings)

How Does Total Compensation For Kuen Kou Compare With Other Companies In The Industry?

According to our data, Victory Securities (Holdings) Company Limited has a market capitalization of HK$657m, and paid its CEO total annual compensation worth HK$2.4m over the year to December 2023. Notably, that's an increase of 13% over the year before. Notably, the salary which is HK$1.99m, represents most of the total compensation being paid.

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$2.1m. This suggests that Victory Securities (Holdings) remunerates its CEO largely in line with the industry average. What's more, Kuen Kou holds HK$90m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	HK$2.0m	HK$1.7m	84%
Other	HK$382k	HK$439k	16%
Total Compensation	HK$2.4m	HK$2.1m	100%

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. There isn't a significant difference between Victory Securities (Holdings) and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Victory Securities (Holdings) Company Limited's Growth

Over the last three years, Victory Securities (Holdings) Company Limited has shrunk its earnings per share by 106% per year. It saw its revenue drop 28% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Victory Securities (Holdings) Company Limited Been A Good Investment?

Boasting a total shareholder return of 71% over three years, Victory Securities (Holdings) Company Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 5 warning signs for Victory Securities (Holdings) (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Important note: Victory Securities (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.