Southeast Asia Properties & Finance Limited's (HKG:252) CEO Might Not Expect Shareholders To Be So Generous This Year

Shareholders will probably not be too impressed with the underwhelming results at Southeast Asia Properties & Finance Limited (HKG:252) recently. At the upcoming AGM on 27 August 2021, shareholders can hear from the board including their plans for turning around performance. 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 Southeast Asia Properties & Finance

Comparing Southeast Asia Properties & Finance Limited's CEO Compensation With the industry

At the time of writing, our data shows that Southeast Asia Properties & Finance Limited has a market capitalization of HK$766m, and reported total annual CEO compensation of HK$4.8m for the year to March 2021. Notably, that's a decrease of 16% over the year before. Notably, the salary which is HK$4.74m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$3.6m. Accordingly, our analysis reveals that Southeast Asia Properties & Finance Limited pays Nai Tuen Chua north of the industry median. What's more, Nai Tuen Chua holds HK$15m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	HK$4.7m	HK$5.7m	99%
Other	HK$60k	HK$60k	1%
Total Compensation	HK$4.8m	HK$5.7m	100%

Speaking on an industry level, nearly 67% of total compensation represents salary, while the remainder of 33% is other remuneration. Southeast Asia Properties & Finance has gone down a largely traditional route, paying Nai Tuen Chua a high salary, giving it preference over non-salary benefits. 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 Southeast Asia Properties & Finance Limited's Growth Numbers

Southeast Asia Properties & Finance Limited has reduced its earnings per share by 55% a year over the last three years. It saw its revenue drop 20% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Southeast Asia Properties & Finance Limited Been A Good Investment?

With a three year total loss of 18% for the shareholders, Southeast Asia Properties & Finance Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Southeast Asia Properties & Finance pays its CEO a majority of compensation through a salary. 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in 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 identified 3 warning signs for Southeast Asia Properties & Finance (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Switching gears from Southeast Asia Properties & Finance, 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.
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