Is Hanison Construction Holdings Limited's (HKG:896) CEO Overpaid Relative To Its Peers?

Simply Wall St

The CEO of Hanison Construction Holdings Limited (HKG:896) is Stewart Wong. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Hanison Construction Holdings

How Does Stewart Wong's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Hanison Construction Holdings Limited has a market cap of HK$1.5b, and is paying total annual CEO compensation of HK$38m. (This figure is for the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at HK$3.5m. We examined companies with market caps from HK$785m to HK$3.1b, and discovered that the median CEO total compensation of that group was HK$1.7m.

As you can see, Stewart Wong is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Hanison Construction Holdings Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Hanison Construction Holdings has changed from year to year.

SEHK:896 CEO Compensation, April 20th 2019

Is Hanison Construction Holdings Limited Growing?

Over the last three years Hanison Construction Holdings Limited has grown its earnings per share (EPS) by an average of 2.6% per year (using a line of best fit). It saw its revenue drop -8.5% over the last year.

I generally like to see a little revenue growth, but I'm happy with the EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Hanison Construction Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with Hanison Construction Holdings Limited for providing a total return of 52% 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 examined the amount Hanison Construction Holdings Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

While we generally prefer to see stronger EPS growth, there's no arguing with the strong returns to shareholders, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. Shareholders may want to check for free if Hanison Construction Holdings insiders are buying or selling shares.

If you want to buy a stock that is better than Hanison Construction Holdings, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.