Increases to CEO Compensation Might Be Put On Hold For Now at Birmingham Sports Holdings Limited (HKG:2309)

Under the guidance of CEO Dongfeng Huang, Birmingham Sports Holdings Limited (HKG:2309) has performed reasonably well recently. As shareholders go into the upcoming AGM on 30 December 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Birmingham Sports Holdings

Comparing Birmingham Sports Holdings Limited's CEO Compensation With the industry

Our data indicates that Birmingham Sports Holdings Limited has a market capitalization of HK$2.0b, and total annual CEO compensation was reported as HK$2.5m for the year to June 2021. That's slightly lower by 4.0% over the previous year. In particular, the salary of HK$2.05m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between HK$780m and HK$3.1b, we discovered that the median CEO total compensation of that group was HK$1.9m. This suggests that Dongfeng Huang is paid more than the median for the industry.

Component	2021	2020	Proportion (2021)
Salary	HK$2.0m	HK$2.0m	80%
Other	HK$501k	HK$607k	20%
Total Compensation	HK$2.5m	HK$2.7m	100%

Talking in terms of the industry, salary represented approximately 92% of total compensation out of all the companies we analyzed, while other remuneration made up 8% of the pie. Birmingham Sports Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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 Birmingham Sports Holdings Limited's Growth Numbers

Birmingham Sports Holdings Limited has seen its earnings per share (EPS) increase by 70% a year over the past three years. Its revenue is down 29% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Birmingham Sports Holdings Limited Been A Good Investment?

Birmingham Sports Holdings Limited has served shareholders reasonably well, with a total return of 30% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for Birmingham Sports Holdings (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

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. 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.