We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Hong Leong Finance Limited's (SGX:S41) CEO For Now

Key Insights

• Hong Leong Finance will host its Annual General Meeting on 24th of April
• CEO Leng Beng Kwek's total compensation includes salary of S$1.21m
• Total compensation is 267% above industry average
• Hong Leong Finance's total shareholder return over the past three years was 16% while its EPS grew by 7.0% over the past three years

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Under the guidance of CEO Leng Beng Kwek, Hong Leong Finance Limited (SGX:S41) 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 24th of April. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Hong Leong Finance

How Does Total Compensation For Leng Beng Kwek Compare With Other Companies In The Industry?

Our data indicates that Hong Leong Finance Limited has a market capitalization of S$1.1b, and total annual CEO compensation was reported as S$3.3m for the year to December 2024. Notably, that's an increase of 10% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at S$1.2m.

For comparison, other companies in the Singapore Consumer Finance industry with market capitalizations ranging between S$525m and S$2.1b had a median total CEO compensation of S$893k. This suggests that Leng Beng Kwek is paid more than the median for the industry. Moreover, Leng Beng Kwek also holds S$17m worth of Hong Leong Finance stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 78% of total compensation represents salary and 22% is other remuneration. In Hong Leong Finance's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Hong Leong Finance Limited's Growth Numbers

Hong Leong Finance Limited's earnings per share (EPS) grew 7.0% per year over the last three years. In the last year, its revenue is up 7.7%.

We're not particularly impressed by the revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Hong Leong Finance Limited Been A Good Investment?

Hong Leong Finance Limited has served shareholders reasonably well, with a total return of 16% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Hong Leong Finance that investors should be aware of in a dynamic business environment.

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.