It's Unlikely That The CEO Of Hutchison Telecommunications Hong Kong Holdings Limited (HKG:215) Will See A Huge Pay Rise This Year

The underwhelming share price performance of Hutchison Telecommunications Hong Kong Holdings Limited (HKG:215) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 10 May 2021. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Hutchison Telecommunications Hong Kong Holdings

How Does Total Compensation For Kenny Koo Compare With Other Companies In The Industry?

Our data indicates that Hutchison Telecommunications Hong Kong Holdings Limited has a market capitalization of HK$7.3b, and total annual CEO compensation was reported as HK$5.2m for the year to December 2020. That is, the compensation was roughly the same as last year. In particular, the salary of HK$2.95m, makes up a fairly large portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between HK$3.1b and HK$12b had a median total CEO compensation of HK$5.2m. This suggests that Hutchison Telecommunications Hong Kong Holdings remunerates its CEO largely in line with the industry average.

Component	2020	2019	Proportion (2020)
Salary	HK$3.0m	HK$2.9m	57%
Other	HK$2.3m	HK$2.2m	43%
Total Compensation	HK$5.2m	HK$5.1m	100%

Speaking on an industry level, nearly 57% of total compensation represents salary, while the remainder of 43% is other remuneration. Our data reveals that Hutchison Telecommunications Hong Kong Holdings allocates salary more or less in line with the wider market. 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 Hutchison Telecommunications Hong Kong Holdings Limited's Growth Numbers

Hutchison Telecommunications Hong Kong Holdings Limited's earnings per share (EPS) grew 97% per year over the last three years. It saw its revenue drop 19% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Hutchison Telecommunications Hong Kong Holdings Limited Been A Good Investment?

Since shareholders would have lost about 23% over three years, some Hutchison Telecommunications Hong Kong Holdings Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders 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.

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. In our study, we found 2 warning signs for Hutchison Telecommunications Hong Kong Holdings you should be aware of, and 1 of them is potentially serious.

Switching gears from Hutchison Telecommunications Hong Kong Holdings, 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. 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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