Key Insights

• Asia Financial Holdings to hold its Annual General Meeting on 4th of June
• Salary of HK$5.73m is part of CEO Bernard Chan's total remuneration
• The total compensation is 287% higher than the average for the industry
• Asia Financial Holdings' EPS grew by 1.8% over the past three years while total shareholder return over the past three years was 7.2%

Under the guidance of CEO Bernard Chan, Asia Financial Holdings Limited (HKG:662) has performed reasonably well recently. As shareholders go into the upcoming AGM on 4th of June, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

How Does Total Compensation For Bernard Chan Compare With Other Companies In The Industry?

Our data indicates that Asia Financial Holdings Limited has a market capitalization of HK$3.4b, and total annual CEO compensation was reported as HK$7.6m for the year to December 2023. We note that's an increase of 16% above last year. In particular, the salary of HK$5.73m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Hong Kong Insurance industry with market capitalizations ranging between HK$1.6b and HK$6.2b had a median total CEO compensation of HK$2.0m. This suggests that Bernard Chan is paid more than the median for the industry. Furthermore, Bernard Chan directly owns HK$7.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 53% of total compensation out of all the companies we analyzed, while other remuneration made up 47% of the pie. Asia Financial Holdings pays out 75% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Asia Financial Holdings Limited's Growth Numbers

Asia Financial Holdings Limited's earnings per share (EPS) grew 1.8% per year over the last three years. Its revenue is up 24% over the last year.

We would argue that the modest growth in revenue is a notable positive. And the modest growth in EPS isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. 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 Asia Financial Holdings Limited Been A Good Investment?

Asia Financial Holdings Limited has generated a total shareholder return of 7.2% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

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. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

Whatever your view on compensation, you might want to check if insiders are buying or selling Asia Financial Holdings shares (free trial).

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.