Cornerstone Financial Holdings Limited's (HKG:8112) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Cornerstone Financial Holdings to hold its Annual General Meeting on 13th of May
• Salary of HK$1.95m is part of CEO Patrick Jonathan Wong's total remuneration
• The total compensation is 50% higher than the average for the industry
• Over the past three years, Cornerstone Financial Holdings' EPS grew by 13% and over the past three years, the total loss to shareholders 64%

Our free stock report includes 2 warning signs investors should be aware of before investing in Cornerstone Financial Holdings. Read for free now.

Shareholders of Cornerstone Financial Holdings Limited (HKG:8112) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 13th of May could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Cornerstone Financial Holdings

How Does Total Compensation For Patrick Jonathan Wong Compare With Other Companies In The Industry?

According to our data, Cornerstone Financial Holdings Limited has a market capitalization of HK$44m, and paid its CEO total annual compensation worth HK$2.8m over the year to December 2024. This means that the compensation hasn't changed much from last year. In particular, the salary of HK$1.95m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Media industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$1.9m. This suggests that Patrick Jonathan Wong is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	HK$2.0m	HK$2.0m	70%
Other	HK$821k	HK$758k	30%
Total Compensation	HK$2.8m	HK$2.7m	100%

On an industry level, around 83% of total compensation represents salary and 17% is other remuneration. It's interesting to note that Cornerstone Financial Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Cornerstone Financial Holdings Limited's Growth

Cornerstone Financial Holdings Limited has seen its earnings per share (EPS) increase by 13% a year over the past three years. Its revenue is down 6.9% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Cornerstone Financial Holdings Limited Been A Good Investment?

With a total shareholder return of -64% over three years, Cornerstone Financial Holdings Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. 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 compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Cornerstone Financial Holdings that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.