Should You Worry About Chen Hsong Holdings Limited's (HKG:57) CEO Salary Level?

The CEO of Chen Hsong Holdings Limited (HKG:57) is Lai Yuen Chiang. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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.

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See our latest analysis for Chen Hsong Holdings

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

At the time of writing our data says that Chen Hsong Holdings Limited has a market cap of HK$1.8b, and is paying total annual CEO compensation of HK$2.8m. (This figure is for the year to March 2018). While we always look at total compensation first, we note that the salary component is less, at HK$2.5m. We looked at a group of companies with market capitalizations from HK$785m to HK$3.1b, and the median CEO total compensation was HK$1.7m.

It would therefore appear that Chen Hsong Holdings Limited pays Lai Yuen Chiang 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 a visual representation of the CEO compensation at Chen Hsong Holdings, below.

SEHK:57 CEO Compensation, May 22nd 2019
SEHK:57 CEO Compensation, May 22nd 2019

Is Chen Hsong Holdings Limited Growing?

Chen Hsong Holdings Limited has increased its earnings per share (EPS) by an average of 98% a year, over the last three years (using a line of best fit). Its revenue is up 4.8% over last year.

This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Chen Hsong Holdings Limited Been A Good Investment?

I think that the total shareholder return of 94%, over three years, would leave most Chen Hsong Holdings Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared the total CEO remuneration paid by Chen Hsong Holdings 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.

However we must not forget that the EPS growth has been very strong over three years. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying Chen Hsong Holdings shares with their own money (free access).

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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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.