Is Luk Fook Holdings (International) Limited's (HKG:590) CEO Paid Enough Relative To Peers?
The CEO of Luk Fook Holdings (International) Limited (HKG:590) is Wai Sheung Wong. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Luk Fook Holdings (International)
How Does Wai Sheung Wong's Compensation Compare With Similar Sized Companies?
Our data indicates that Luk Fook Holdings (International) Limited is worth HK$11b, and total annual CEO compensation was reported as HK$72m for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at HK$55m. We looked at a group of companies with market capitalizations from HK$7.8b to HK$25b, and the median CEO total compensation was HK$4.2m.
Thus we can conclude that Wai Sheung Wong receives more in total compensation than the median of a group of companies in the same market, and of similar size to Luk Fook Holdings (International) Limited. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Luk Fook Holdings (International) has changed over time.
Is Luk Fook Holdings (International) Limited Growing?
On average over the last three years, Luk Fook Holdings (International) Limited has grown earnings per share (EPS) by 15% each year (using a line of best fit). It saw its revenue drop 11% over the last year.
This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings.
Has Luk Fook Holdings (International) Limited Been A Good Investment?
With a total shareholder return of 1.5% over three years, Luk Fook Holdings (International) Limited has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
We examined the amount Luk Fook Holdings (International) 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.
However, the earnings per share growth over three years is certainly impressive. We also note that, over the same time frame, shareholder returns haven't been bad. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we'd recommend further research on management. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Luk Fook Holdings (International).
If you want to buy a stock that is better than Luk Fook Holdings (International), 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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