U.S. Markets closed

Is CITIC Telecom International Holdings Limited's (HKG:1883) CEO Being Overpaid?

Simply Wall St

Tiger Lin has been the CEO of CITIC Telecom International Holdings Limited (HKG:1883) since 2015. 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. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for CITIC Telecom International Holdings

How Does Tiger Lin's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that CITIC Telecom International Holdings Limited has a market cap of HK$11b, and is paying total annual CEO compensation of HK$9.0m. (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$4.2m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$7.8b to HK$25b. The median total CEO compensation was HK$3.8m.

Thus we can conclude that Tiger Lin receives more in total compensation than the median of a group of companies in the same market, and of similar size to CITIC Telecom International Holdings 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 a visual representation of the CEO compensation at CITIC Telecom International Holdings, below.

SEHK:1883 CEO Compensation, August 13th 2019

Is CITIC Telecom International Holdings Limited Growing?

On average over the last three years, CITIC Telecom International Holdings Limited has grown earnings per share (EPS) by 3.4% each year (using a line of best fit). In the last year, its revenue is up 27%.

I like the look of the strong year-on-year improvement in revenue. Combined with modest EPS growth, we get a good impression of the company. So while I'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! You might want to check this free visual report on analyst forecasts for future earnings.

Has CITIC Telecom International Holdings Limited Been A Good Investment?

CITIC Telecom International Holdings Limited has generated a total shareholder return of 23% over three years, so most shareholders would be reasonably content. 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 CITIC Telecom International Holdings 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.

Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. Considering this, we wouldn't want to see any big pay rises, although we'd stop short of calling the CEO compensation unfair. Shareholders may want to check for free if CITIC Telecom International Holdings insiders are buying or selling shares.

If you want to buy a stock that is better than CITIC Telecom International Holdings, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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.