Ken Yeung has been the CEO of TOM Group Limited (HKG:2383) since 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for TOM Group

How Does Ken Yeung's Compensation Compare With Similar Sized Companies?

According to our data, TOM Group Limited has a market capitalization of HK$4.5b, and paid its CEO total annual compensation worth HK$6.0m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$5.5m. We examined companies with market caps from HK$1.6b to HK$6.2b, and discovered that the median CEO total compensation of that group was HK$2.7m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of TOM Group. Talking in terms of the sector, salary represented approximately 84% of total compensation out of all the companies we analysed, while other remuneration made up 16% of the pie. TOM Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation

Thus we can conclude that Ken Yeung receives more in total compensation than the median of a group of companies in the same market, and of similar size to TOM Group Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. You can see, below, how CEO compensation at TOM Group has changed over time.

Is TOM Group Limited Growing?

TOM Group Limited has seen earnings per share (EPS) move positively by an average of 13% a year, over the last three years (using a line of best fit). It saw its revenue drop 3.0% over the last year.

This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has TOM Group Limited Been A Good Investment?

Given the total loss of 38% over three years, many shareholders in TOM Group Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by TOM Group Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering positive per-share earnings movement, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. CEO compensation is an important area to keep your eyes on, but we've also identified 3 warning signs for TOM Group (1 shouldn't be ignored!) that you should be aware of before investing here.

Important note: TOM Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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