Shareholders May Not Be So Generous With Pacific Basin Shipping Limited's (HKG:2343) CEO Compensation And Here's Why

Key Insights

• Pacific Basin Shipping to hold its Annual General Meeting on 19th of April
• CEO Martin Fruergaard's total compensation includes salary of US$1.09m
• Total compensation is 976% above industry average
• Pacific Basin Shipping's EPS grew by 12% over the past three years while total shareholder return over the past three years was 56%

Under the guidance of CEO Martin Fruergaard, Pacific Basin Shipping Limited (HKG:2343) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 19th of April. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Pacific Basin Shipping

How Does Total Compensation For Martin Fruergaard Compare With Other Companies In The Industry?

At the time of writing, our data shows that Pacific Basin Shipping Limited has a market capitalization of HK$13b, and reported total annual CEO compensation of US$2.2m for the year to December 2023. Notably, that's a decrease of 24% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.

On examining similar-sized companies in the Hong Kong Shipping industry with market capitalizations between HK$7.8b and HK$25b, we discovered that the median CEO total compensation of that group was US$207k. Accordingly, our analysis reveals that Pacific Basin Shipping Limited pays Martin Fruergaard north of the industry median. What's more, Martin Fruergaard holds HK$22m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$1.1m	US$919k	49%
Other	US$1.1m	US$2.0m	51%
Total Compensation	US$2.2m	US$2.9m	100%

On an industry level, around 67% of total compensation represents salary and 33% is other remuneration. Pacific Basin Shipping pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Pacific Basin Shipping Limited's Growth

Pacific Basin Shipping Limited has seen its earnings per share (EPS) increase by 12% a year over the past three years. In the last year, its revenue is down 30%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Pacific Basin Shipping Limited Been A Good Investment?

We think that the total shareholder return of 56%, over three years, would leave most Pacific Basin Shipping Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Pacific Basin Shipping that investors should be aware of in a dynamic business environment.

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.