It's Unlikely That PCCW Limited's (HKG:8) CEO Will See A Huge Pay Rise This Year

Key Insights

• PCCW will host its Annual General Meeting on 15th of May
• Salary of HK$10.5m is part of CEO Susanna Hui's total remuneration
• Total compensation is 285% above industry average
• PCCW's total shareholder return over the past three years was 60% while its EPS was down 66% over the past three years

We've discovered 3 warning signs about PCCW. View them for free.

PCCW Limited (HKG:8) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 15th 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. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

See our latest analysis for PCCW

Comparing PCCW Limited's CEO Compensation With The Industry

Our data indicates that PCCW Limited has a market capitalization of HK$41b, and total annual CEO compensation was reported as HK$57m for the year to December 2024. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at HK$11m.

In comparison with other companies in the Hong Kong Telecom industry with market capitalizations ranging from HK$31b to HK$93b, the reported median CEO total compensation was HK$15m. This suggests that Susanna Hui is paid more than the median for the industry. Moreover, Susanna Hui also holds HK$42m worth of PCCW stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	HK$11m	HK$10m	19%
Other	HK$46m	HK$48m	81%
Total Compensation	HK$57m	HK$58m	100%

Speaking on an industry level, nearly 42% of total compensation represents salary, while the remainder of 58% is other remuneration. It's interesting to note that PCCW allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

PCCW Limited's Growth

PCCW Limited has reduced its earnings per share by 66% a year over the last three years. Its revenue is up 3.3% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has PCCW Limited Been A Good Investment?

We think that the total shareholder return of 60%, over three years, would leave most PCCW Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current 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 pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for PCCW you should be aware of, and 2 of them are a bit concerning.

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.