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Is CK Hutchison Holdings Limited (HKG:1) Overpaying Its CEO?

Simply Wall St

Victor Li is the CEO of CK Hutchison Holdings Limited (HKG:1). This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. 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 CK Hutchison Holdings

How Does Victor Li's Compensation Compare With Similar Sized Companies?

Our data indicates that CK Hutchison Holdings Limited is worth HK$283b, and total annual CEO compensation was reported as HK$79m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$4.9m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We took a group of companies with market capitalizations over HK$63b, and calculated the median CEO total compensation to be HK$6.3m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).

It would therefore appear that CK Hutchison Holdings Limited pays Victor Li more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration 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.

The graphic below shows how CEO compensation at CK Hutchison Holdings has changed from year to year.

SEHK:1 CEO Compensation, October 23rd 2019

Is CK Hutchison Holdings Limited Growing?

CK Hutchison Holdings Limited has increased its earnings per share (EPS) by an average of 7.8% a year, over the last three years (using a line of best fit). It achieved revenue growth of 12% over the last year.

This revenue growth could really point to a brighter future. And the modest growth in earnings per share isn't bad, either. Although we'll stop short of calling the stock a top performer, we think the company has potential. It could be important to check this free visual depiction of what analysts expect for the future.

Has CK Hutchison Holdings Limited Been A Good Investment?

Since shareholders would have lost about 18% over three years, some CK Hutchison Holdings Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared the total CEO remuneration paid by CK Hutchison Holdings Limited, and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of that group.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at CK Hutchison Holdings.

If you want to buy a stock that is better than CK Hutchison 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.