Derek Chiu is the CEO of Far East Hotels and Entertainment Limited (HKG:37). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Derek Chiu's Compensation Compare With Similar Sized Companies?
Our data indicates that Far East Hotels and Entertainment Limited is worth HK$131m, and total annual CEO compensation is HK$2.5m. (This number is for the twelve months until March 2019). That's actually a decrease on the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at HK$1.3m. We examined a group of similar sized companies, with market capitalizations of below HK$1.6b. The median CEO total compensation in that group is HK$1.8m.
Thus we can conclude that Derek Chiu receives more in total compensation than the median of a group of companies in the same market, and of similar size to Far East Hotels and Entertainment 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 Far East Hotels and Entertainment has changed over time.
Is Far East Hotels and Entertainment Limited Growing?
On average over the last three years, Far East Hotels and Entertainment Limited has grown earnings per share (EPS) by 7.7% each year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
I generally like to see a little revenue growth, but it is good to see EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Far East Hotels and Entertainment Limited Been A Good Investment?
Given the total loss of 40% over three years, many shareholders in Far East Hotels and Entertainment Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at Far East Hotels and Entertainment Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Far East Hotels and Entertainment (free visualization of insider trades).
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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