Key Insights

• HKT Trust and HKT will host its Annual General Meeting on 30th of May
• Total pay for CEO Susanna Hui includes HK$4.87m salary
• The overall pay is 56% above the industry average
• Over the past three years, HKT Trust and HKT's EPS fell by 2.0% and over the past three years, the total shareholder return was 3.6%

The share price of HKT Trust and HKT Limited (HKG:6823) has struggled to grow by much over the last few years and probably has to do with the fact that earnings growth has gone backwards. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 30th of May. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. 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.

Comparing HKT Trust and HKT Limited's CEO Compensation With The Industry

Our data indicates that HKT Trust and HKT Limited has a market capitalization of HK$69b, and total annual CEO compensation was reported as HK$24m for the year to December 2023. That's a modest increase of 5.1% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at HK$4.9m.

On comparing similar companies from the Hong Kong Telecom industry with market caps ranging from HK$31b to HK$94b, we found that the 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.

Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. HKT Trust and HKT pays a modest slice of remuneration through salary, as compared 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 HKT Trust and HKT Limited's Growth Numbers

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.

Its a bit disappointing to see that the company has failed to grow its EPS. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

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. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

While it's true that the share price growth hasn't been bad, it's hard to overlook the lack of earnings growth and this makes us question whether there will be any strong catalyst for the stock to improve. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for HKT Trust and HKT (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

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.