We Think Celestial Asia Securities Holdings Limited's (HKG:1049) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Celestial Asia Securities Holdings will host its Annual General Meeting on 3rd of June
• Salary of HK$4.20m is part of CEO Bankee Kwan's total remuneration
• Total compensation is 151% above industry average
• Celestial Asia Securities Holdings' three-year loss to shareholders was 11% while its EPS was down 30% over the past three years

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The results at Celestial Asia Securities Holdings Limited (HKG:1049) have been quite disappointing recently and CEO Bankee Kwan bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 3rd of June. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Celestial Asia Securities Holdings

How Does Total Compensation For Bankee Kwan Compare With Other Companies In The Industry?

Our data indicates that Celestial Asia Securities Holdings Limited has a market capitalization of HK$89m, and total annual CEO compensation was reported as HK$4.2m for the year to December 2024. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at HK$4.20m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Hong Kong Specialty Retail industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.7m. Hence, we can conclude that Bankee Kwan is remunerated higher than the industry median. Furthermore, Bankee Kwan directly owns HK$44m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. Celestial Asia Securities Holdings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to 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.

Celestial Asia Securities Holdings Limited's Growth

Celestial Asia Securities Holdings Limited has reduced its earnings per share by 30% a year over the last three years. In the last year, its revenue is down 13%.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Celestial Asia Securities Holdings Limited Been A Good Investment?

With a three year total loss of 11% for the shareholders, Celestial Asia Securities Holdings Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Celestial Asia Securities Holdings pays its CEO a majority of compensation through a salary. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Celestial Asia Securities Holdings (2 are a bit concerning!) that you should be aware of before investing here.

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.