Here's Why Hudson Investment Group Limited's (ASX:HGL) CEO May Not Expect A Pay Rise This Year

The underwhelming performance at Hudson Investment Group Limited (ASX:HGL) recently has probably not pleased shareholders. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 18 May 2021. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

Check out our latest analysis for Hudson Investment Group

Comparing Hudson Investment Group Limited's CEO Compensation With the industry

Our data indicates that Hudson Investment Group Limited has a market capitalization of AU$18m, and total annual CEO compensation was reported as AU$150k for the year to December 2020. Notably, that's a decrease of 29% over the year before. Notably, the salary of AU$150k is the entirety of the CEO compensation.

For comparison, other companies in the industry with market capitalizations below AU$254m, reported a median total CEO compensation of AU$487k. That is to say, Alan Beasley is paid under the industry median.

Speaking on an industry level, nearly 81% of total compensation represents salary, while the remainder of 19% is other remuneration. On a company level, Hudson Investment Group prefers to reward its CEO through a salary, opting not to pay Alan Beasley through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Hudson Investment Group Limited's Growth Numbers

Over the last three years, Hudson Investment Group Limited has shrunk its earnings per share by 71% per year. Its revenue is up 3.1% over the last year.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Hudson Investment Group Limited Been A Good Investment?

Since shareholders would have lost about 26% over three years, some Hudson Investment Group Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Hudson Investment Group rewards its CEO solely through a salary, ignoring non-salary benefits completely. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Hudson Investment Group you should be aware of, and 1 of them is potentially serious.

Important note: Hudson Investment Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

This article by Simply Wall St is general in nature. 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.

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