Clement Mak has been the CEO of Greater Bay Area Investments Group Holdings Limited (HKG:261) since 2002. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Clement Mak's Compensation Compare With Similar Sized Companies?
Our data indicates that Greater Bay Area Investments Group Holdings Limited is worth HK$1.8b, and total annual CEO compensation was reported as HK$7.4m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at HK$2.8m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from HK$778m to HK$3.1b, we found the median CEO total compensation was HK$2.3m.
Thus we can conclude that Clement Mak receives more in total compensation than the median of a group of companies in the same market, and of similar size to Greater Bay Area Investments Group Holdings Limited. However, this doesn't necessarily mean the pay 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 Greater Bay Area Investments Group Holdings has changed over time.
Is Greater Bay Area Investments Group Holdings Limited Growing?
On average over the last three years, Greater Bay Area Investments Group Holdings Limited has grown earnings per share (EPS) by 15% each year (using a line of best fit). Its revenue is down 30% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Greater Bay Area Investments Group Holdings Limited Been A Good Investment?
Since shareholders would have lost about 50% over three years, some Greater Bay Area Investments Group Holdings Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount Greater Bay Area Investments Group 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.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Greater Bay Area Investments Group Holdings.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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