In This Article:
In 2011 John Lee was appointed CEO of Hongkong Chinese Limited (HKG:655). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Hongkong Chinese
How Does John Lee's Compensation Compare With Similar Sized Companies?
Our data indicates that Hongkong Chinese Limited is worth HK$1.8b, and total annual CEO compensation was reported as HK$1.5m for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at HK$1.2m. We examined companies with market caps from HK$784m to HK$3.1b, and discovered that the median CEO total compensation of that group was HK$2.3m.
A first glance this seems like a real positive for shareholders, since John Lee is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Hongkong Chinese has changed over time.
Is Hongkong Chinese Limited Growing?
Over the last three years Hongkong Chinese Limited has shrunk its earnings per share by an average of 15% per year (measured with a line of best fit). It saw its revenue drop 30% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Hongkong Chinese Limited Been A Good Investment?
Given the total loss of 32% over three years, many shareholders in Hongkong Chinese Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
It looks like Hongkong Chinese Limited pays its CEO less than similar sized companies.
The compensation paid to John Lee is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. So you may want to check if insiders are buying Hongkong Chinese shares with their own money (free access).