In 2014 Derek Zen was appointed CEO of Wai Kee Holdings Limited (HKG:610). 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Derek Zen's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Wai Kee Holdings Limited has a market cap of HK$3.8b, and reported total annual CEO compensation of HK$37m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at HK$2.1m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from HK$1.6b to HK$6.2b, and the median CEO total compensation was HK$2.7m.
It would therefore appear that Wai Kee Holdings Limited pays Derek Zen 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 Wai Kee Holdings has changed over time.
Is Wai Kee Holdings Limited Growing?
Wai Kee Holdings Limited has increased its earnings per share (EPS) by an average of 32% a year, over the last three years (using a line of best fit). It achieved revenue growth of 1.9% over the last year.
This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Wai Kee Holdings Limited Been A Good Investment?
I think that the total shareholder return of 91%, over three years, would leave most Wai Kee Holdings Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Wai Kee Holdings Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within 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. As a result of this good performance, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Wai Kee Holdings.
Important note: Wai Kee 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.
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