Is Koon Holdings Limited's (SGX:5DL) CEO Overpaid Relative To Its Peers?
Kai Wing Yuen has been the CEO of Koon Holdings Limited (SGX:5DL) since 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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.
See our latest analysis for Koon Holdings
How Does Kai Wing Yuen's Compensation Compare With Similar Sized Companies?
According to our data, Koon Holdings Limited has a market capitalization of S$6.8m, and pays its CEO total annual compensation worth S$791k. (This number is for the twelve months until December 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at S$443k. We examined a group of similar sized companies, with market capitalizations of below S$271m. The median CEO total compensation in that group is S$270k.
It would therefore appear that Koon Holdings Limited pays Kai Wing Yuen more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Koon Holdings has changed from year to year.
Is Koon Holdings Limited Growing?
Koon Holdings Limited has reduced its earnings per share by an average of 119% a year, over the last three years (measured with a line of best fit). It saw its revenue drop -29% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Koon Holdings Limited Been A Good Investment?
Since shareholders would have lost about 74% over three years, some Koon Holdings Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We examined the amount Koon Holdings Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Arguably worse, investors are without a positive return for the last three years. Some might well form the view that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Koon Holdings shares (free trial).
Important note: Koon Holdings 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.
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.
