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In 2014 Daniel Seah was appointed CEO of Digital Domain Holdings Limited (HKG:547). First, this article will compare CEO compensation with compensation at similar sized companies. 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 Daniel Seah's Compensation Compare With Similar Sized Companies?
Our data indicates that Digital Domain Holdings Limited is worth HK$3.9b, and total annual CEO compensation is HK$3.5m. (This figure is for the year to December 2018). Notably, the salary of HK$3.5m is the vast majority of the CEO compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$1.6b to HK$6.3b. The median total CEO compensation was HK$2.3m.
It would therefore appear that Digital Domain Holdings Limited pays Daniel Seah 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. 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 Digital Domain Holdings has changed over time.
Is Digital Domain Holdings Limited Growing?
Over the last three years Digital Domain Holdings Limited has grown its earnings per share (EPS) by an average of 3.3% per year (using a line of best fit). Its revenue is down -15% over last year.
I would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Digital Domain Holdings Limited Been A Good Investment?
Given the total loss of 75% over three years, many shareholders in Digital Domain Holdings Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at Digital Domain Holdings Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. 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. Shareholders may want to check for free if Digital Domain Holdings insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at email@example.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.