Key Insights

• Fu Shek Financial Holdings will host its Annual General Meeting on 6th of September
• Total pay for CEO Man Chiu Sy includes HK$822.0k salary
• Total compensation is 37% below industry average
• Fu Shek Financial Holdings' three-year loss to shareholders was 11% while its EPS was down 31% over the past three years

Performance at Fu Shek Financial Holdings Limited (HKG:2263) has been rather uninspiring recently and shareholders may be wondering how CEO Man Chiu Sy plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 6th of September. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

How Does Total Compensation For Man Chiu Sy Compare With Other Companies In The Industry?

At the time of writing, our data shows that Fu Shek Financial Holdings Limited has a market capitalization of HK$170m, and reported total annual CEO compensation of HK$1.2m for the year to March 2024. We note that's a decrease of 17% compared to last year. In particular, the salary of HK$822.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Capital Markets industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was HK$1.9m. In other words, Fu Shek Financial Holdings pays its CEO lower than the industry median.

On an industry level, around 84% of total compensation represents salary and 16% is other remuneration. It's interesting to note that Fu Shek Financial Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. 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 Fu Shek Financial Holdings Limited's Growth Numbers

Fu Shek Financial Holdings Limited has reduced its earnings per share by 31% a year over the last three years. It achieved revenue growth of 25% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is 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 Fu Shek Financial Holdings Limited Been A Good Investment?

Since shareholders would have lost about 11% over three years, some Fu Shek Financial Holdings Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders will be disappointed with the share price performance as they go into the AGM. This may have to do with the lack of earnings growth at the company, which may explain the lacklustre returns. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board and assess if the board's plan is likely to improve company performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Fu Shek Financial Holdings (1 can't be ignored!) that you should be aware of before investing here.

Switching gears from Fu Shek Financial Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.