Shareholders May Not Be So Generous With Hopson Development Holdings Limited's (HKG:754) CEO Compensation And Here's Why

Key Insights

• Hopson Development Holdings to hold its Annual General Meeting on 14th of June
• Total pay for CEO Kut Yung Chu includes HK$5.17m salary
• The total compensation is similar to the average for the industry
• Over the past three years, Hopson Development Holdings' EPS fell by 40% and over the past three years, the total loss to shareholders 80%

In the past three years, the share price of Hopson Development Holdings Limited (HKG:754) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. The AGM coming up on 14th of June will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

Check out our latest analysis for Hopson Development Holdings

Comparing Hopson Development Holdings Limited's CEO Compensation With The Industry

Our data indicates that Hopson Development Holdings Limited has a market capitalization of HK$14b, and total annual CEO compensation was reported as HK$5.2m for the year to December 2023. We note that's an increase of 11% above last year. It is worth noting that the CEO compensation consists entirely of the salary, worth HK$5.2m.

On examining similar-sized companies in the Hong Kong Real Estate industry with market capitalizations between HK$7.8b and HK$25b, we discovered that the median CEO total compensation of that group was HK$4.7m. So it looks like Hopson Development Holdings compensates Kut Yung Chu in line with the median for the industry. Moreover, Kut Yung Chu also holds HK$33m worth of Hopson Development Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	HK$5.2m	HK$4.7m	100%
Other	-	-	-
Total Compensation	HK$5.2m	HK$4.7m	100%

On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. On a company level, Hopson Development Holdings prefers to reward its CEO through a salary, opting not to pay Kut Yung Chu through 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.

Hopson Development Holdings Limited's Growth

Over the last three years, Hopson Development Holdings Limited has shrunk its earnings per share by 40% per year. Its revenue is up 26% over the last year.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Hopson Development Holdings Limited Been A Good Investment?

With a total shareholder return of -80% over three years, Hopson Development 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...

Hopson Development Holdings rewards its CEO solely through a salary, ignoring non-salary benefits completely. The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with 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. In our study, we found 4 warning signs for Hopson Development Holdings you should be aware of, and 2 of them are a bit concerning.

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.