HKT Trust and HKT Limited's (HKG:6823) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• HKT Trust and HKT to hold its Annual General Meeting on 30th of May
• Salary of HK$4.87m is part of CEO Susanna Hui's total remuneration
• Total compensation is 56% above industry average
• HKT Trust and HKT's total shareholder return over the past three years was 3.6% while its EPS was down 2.0% over the past three years

The anaemic share price growth at HKT Trust and HKT Limited (HKG:6823) over the past few years has probably not impressed shareholders and may be due to earnings not growing over that period. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 30th of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

See our latest analysis for HKT Trust and HKT

How Does Total Compensation For Susanna Hui Compare With Other Companies In The Industry?

At the time of writing, our data shows that HKT Trust and HKT Limited has a market capitalization of HK$69b, and reported total annual CEO compensation of HK$24m for the year to December 2023. That's a modest increase of 5.1% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$4.9m.

In comparison with other companies in the Hong Kong Telecom industry with market capitalizations ranging from HK$31b to HK$94b, the reported median CEO total compensation was HK$16m. Hence, we can conclude that Susanna Hui is remunerated higher than the industry median. Furthermore, Susanna Hui directly owns HK$48m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	HK$4.9m	HK$4.7m	20%
Other	HK$19m	HK$18m	80%
Total Compensation	HK$24m	HK$23m	100%

Talking in terms of the industry, salary represented approximately 45% of total compensation out of all the companies we analyzed, while other remuneration made up 55% of the pie. In HKT Trust and HKT's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

HKT Trust and HKT Limited's Growth

Over the last three years, HKT Trust and HKT Limited has shrunk its earnings per share by 2.0% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

The lack of EPS growth is certainly uninspiring. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 HKT Trust and HKT Limited Been A Good Investment?

With a total shareholder return of 3.6% over three years, HKT Trust and HKT Limited has done okay by shareholders, but there's always room for improvement. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

The flat share price growth combined with the the fact that earnings have failed to grow makes us wonder whether the share price will have any further strong momentum. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns 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 is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for HKT Trust and HKT (1 doesn't sit too well with us!) that you should be aware of before investing here.

Important note: HKT Trust and HKT is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.