Key Insights
- Tencent Holdings' Annual General Meeting to take place on 14th of May
- CEO Pony Ma's total compensation includes salary of CN¥7.18m
- The overall pay is comparable to the industry average
- Tencent Holdings' total shareholder return over the past three years was 50% while its EPS was down 3.3% over the past three years
The share price of Tencent Holdings Limited (HKG:700) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 14th 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.
See our latest analysis for Tencent Holdings
How Does Total Compensation For Pony Ma Compare With Other Companies In The Industry?
At the time of writing, our data shows that Tencent Holdings Limited has a market capitalization of HK$4.5t, and reported total annual CEO compensation of CN¥45m for the year to December 2024. That's just a smallish increase of 5.0% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CN¥7.2m.
On comparing similar companies in the Hong Kong Interactive Media and Services industry with market capitalizations above HK$62b, we found that the median total CEO compensation was CN¥45m. This suggests that Tencent Holdings remunerates its CEO largely in line with the industry average. What's more, Pony Ma holds HK$348b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | CN¥7.2m | CN¥6.8m | 16% |
| Other | CN¥38m | CN¥36m | 84% |
| Total Compensation | CN¥45m | CN¥43m | 100% |
Talking in terms of the industry, salary represented approximately 32% of total compensation out of all the companies we analyzed, while other remuneration made up 68% of the pie. Tencent Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Tencent Holdings Limited's Growth Numbers
Over the last three years, Tencent Holdings Limited has shrunk its earnings per share by 3.3% per year. In the last year, its revenue is up 8.4%.
Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Tencent Holdings Limited Been A Good Investment?
Boasting a total shareholder return of 50% over three years, Tencent Holdings Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. 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.
Whatever your view on compensation, you might want to check if insiders are buying or selling Tencent Holdings shares (free trial).
Switching gears from Tencent 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.