Does Sunway International Holdings Limited's (HKG:58) CEO Pay Matter?
In 2017 Chongyang Li was appointed CEO of Sunway International Holdings Limited (HKG:58). 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 Sunway International Holdings
How Does Chongyang Li's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Sunway International Holdings Limited has a market cap of HK$85m, and reported total annual CEO compensation of HK$1.2m for the year to December 2018. Notably, the salary of HK$1.2m is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO total compensation was HK$1.8m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. Investors will find it interesting that Sunway International Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits.
Most shareholders would consider it a positive that Chongyang Li takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion. You can see, below, how CEO compensation at Sunway International Holdings has changed over time.
Is Sunway International Holdings Limited Growing?
Sunway International Holdings Limited has reduced its earnings per share by an average of 6.9% a year, over the last three years (measured with a line of best fit). Its revenue is down 14% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Sunway International Holdings Limited Been A Good Investment?
Since shareholders would have lost about 91% over three years, some Sunway International Holdings Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
It appears that Sunway International Holdings Limited remunerates its CEO below most similar sized companies.
Shareholders should note that compensation for Chongyang Li is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. On another note, Sunway International Holdings has 5 warning signs (and 1 which is significant) we think you should know about.
If you want to buy a stock that is better than Sunway International Holdings, this free list of high return, low debt companies is a great place to look.
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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