In 1998 Seng-Hui Lee was appointed CEO of Allied Group Limited (HKG:373). 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Seng-Hui Lee's Compensation Compare With Similar Sized Companies?
Our data indicates that Allied Group Limited is worth HK$7.0b, and total annual CEO compensation is HK$72m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at HK$8.9m. We examined companies with market caps from HK$3.1b to HK$13b, and discovered that the median CEO total compensation of that group was HK$4.0m.
It would therefore appear that Allied Group Limited pays Seng-Hui Lee 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 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 Allied Group has changed over time.
Is Allied Group Limited Growing?
On average over the last three years, Allied Group Limited has shrunk earnings per share by 15% each year (measured with a line of best fit). Its revenue is up 7.1% over last year.
Unfortunately, earnings per share have trended lower over the last three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Allied Group Limited Been A Good Investment?
With a total shareholder return of 17% over three years, Allied Group Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Allied Group Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
While shareholder returns are acceptable, they don't delight. So you may want to delve deeper, because we don't think the CEO pay is too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Allied Group (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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