In 2017 Louisa Cheang was appointed CEO of Hang Seng Bank Limited (HKG:11). First, this article will compare CEO compensation with compensation at other large 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.

See our latest analysis for Hang Seng Bank

How Does Louisa Cheang's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Hang Seng Bank Limited has a market cap of HK$321b, and reported total annual CEO compensation of HK$12m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at HK$11m. We took a group of companies with market capitalizations over HK$62b, and calculated the median CEO total compensation to be HK$8.9m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

As you can see, Louisa Cheang is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Hang Seng Bank Limited is paying too much. 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 Hang Seng Bank has changed over time.

Is Hang Seng Bank Limited Growing?

Over the last three years Hang Seng Bank Limited has grown its earnings per share (EPS) by an average of 18% per year (using a line of best fit). In the last year, its revenue is up 7.8%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.

Has Hang Seng Bank Limited Been A Good Investment?

Hang Seng Bank Limited has served shareholders reasonably well, with a total return of 18% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We compared the total CEO remuneration paid by Hang Seng Bank Limited, and compared it to remuneration at a group of other large companies. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. Looking at the same time period, we think that the shareholder returns are respectable. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we'd recommend further research on management. Shareholders may want to check for free if Hang Seng Bank insiders are buying or selling shares.

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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