In 2017 Frank Lai was appointed CEO of Dah Chong Hong Holdings Limited (HKG:1828). First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Dah Chong Hong Holdings

How Does Frank Lai's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Dah Chong Hong Holdings Limited has a market cap of HK$7.0b, and reported total annual CEO compensation of HK$10m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$5.3m. We looked at a group of companies with market capitalizations from HK$3.1b to HK$12b, and the median CEO total compensation was HK$3.7m.

Thus we can conclude that Frank Lai receives more in total compensation than the median of a group of companies in the same market, and of similar size to Dah Chong Hong Holdings Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Dah Chong Hong Holdings has changed over time.

Is Dah Chong Hong Holdings Limited Growing?

On average over the last three years, Dah Chong Hong Holdings Limited has grown earnings per share (EPS) by 17% each year (using a line of best fit). It saw its revenue drop 4.1% 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. It could be important to check this free visual depiction of what analysts expect for the future.

Has Dah Chong Hong Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with Dah Chong Hong Holdings Limited for providing a total return of 42% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared total CEO remuneration at Dah Chong Hong Holdings Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Dah Chong Hong Holdings.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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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