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Key Insights

• Pacific Basin Shipping will host its Annual General Meeting on 25th of April
• Total pay for CEO Martin Fruergaard includes US$1.12m salary
• The total compensation is 734% higher than the average for the industry
• Pacific Basin Shipping's EPS declined by 47% over the past three years while total shareholder loss over the past three years was 41%

Shareholders will probably not be too impressed with the underwhelming results at Pacific Basin Shipping Limited (HKG:2343) recently. At the upcoming AGM on 25th of April, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Pacific Basin Shipping

How Does Total Compensation For Martin Fruergaard Compare With Other Companies In The Industry?

At the time of writing, our data shows that Pacific Basin Shipping Limited has a market capitalization of HK$8.5b, and reported total annual CEO compensation of US$1.9m for the year to December 2024. We note that's a decrease of 17% compared to last year. We note that the salary portion, which stands at US$1.12m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Hong Kong Shipping industry with market capitalizations ranging between HK$3.1b and HK$12b had a median total CEO compensation of US$222k. Accordingly, our analysis reveals that Pacific Basin Shipping Limited pays Martin Fruergaard north of the industry median. Moreover, Martin Fruergaard also holds HK$16m worth of Pacific Basin Shipping stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 80% of total compensation out of all the companies we analyzed, while other remuneration made up 20% of the pie. Pacific Basin Shipping sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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 Pacific Basin Shipping Limited's Growth Numbers

Pacific Basin Shipping Limited has reduced its earnings per share by 47% a year over the last three years. Its revenue is up 12% over the last year.

Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Pacific Basin Shipping Limited Been A Good Investment?

With a total shareholder return of -41% over three years, Pacific Basin Shipping Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Pacific Basin Shipping that you should be aware of before investing.

Switching gears from Pacific Basin Shipping, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.