Pacific Century Premium Developments Limited's (HKG:432) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Pacific Century Premium Developments' Annual General Meeting to take place on 14th of May
• Salary of HK$9.46m is part of CEO Benjamin Lam's total remuneration
• Total compensation is 1,288% above industry average
• Pacific Century Premium Developments' three-year loss to shareholders was 58% while its EPS grew by 35% over the past three years

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The underwhelming share price performance of Pacific Century Premium Developments Limited (HKG:432) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 14th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Pacific Century Premium Developments

Comparing Pacific Century Premium Developments Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Pacific Century Premium Developments Limited has a market capitalization of HK$406m, and reported total annual CEO compensation of HK$24m for the year to December 2024. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at HK$9.5m.

In comparison with other companies in the Hong Kong Real Estate industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was HK$1.7m. Accordingly, our analysis reveals that Pacific Century Premium Developments Limited pays Benjamin Lam north of the industry median.

Speaking on an industry level, nearly 81% of total compensation represents salary, while the remainder of 19% is other remuneration. Pacific Century Premium Developments 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 Pacific Century Premium Developments Limited's Growth Numbers

Over the past three years, Pacific Century Premium Developments Limited has seen its earnings per share (EPS) grow by 35% per year. It achieved revenue growth of 9.6% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Pacific Century Premium Developments Limited Been A Good Investment?

Few Pacific Century Premium Developments Limited shareholders would feel satisfied with the return of -58% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Pacific Century Premium Developments that investors should be aware of in a dynamic business environment.

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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.