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Does Lam Soon (Hong Kong) Limited's (HKG:411) CEO Pay Compare Well With Peers?

Simply Wall St

Joseph Leung has been the CEO of Lam Soon (Hong Kong) Limited (HKG:411) since 2012. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Lam Soon (Hong Kong)

How Does Joseph Leung's Compensation Compare With Similar Sized Companies?

Our data indicates that Lam Soon (Hong Kong) Limited is worth HK$3.5b, and total annual CEO compensation is HK$3.4m. (This number is for the twelve months until June 2018). Notably, the salary of HK$3.7m is the vast majority of the CEO compensation. We examined companies with market caps from HK$1.6b to HK$6.3b, and discovered that the median CEO total compensation of that group was HK$2.3m.

Thus we can conclude that Joseph Leung receives more in total compensation than the median of a group of companies in the same market, and of similar size to Lam Soon (Hong Kong) 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 a visual representation of the CEO compensation at Lam Soon (Hong Kong), below.

SEHK:411 CEO Compensation, July 26th 2019

Is Lam Soon (Hong Kong) Limited Growing?

On average over the last three years, Lam Soon (Hong Kong) Limited has grown earnings per share (EPS) by 23% each year (using a line of best fit). In the last year, its revenue is up 7.0%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Lam Soon (Hong Kong) Limited Been A Good Investment?

Boasting a total shareholder return of 115% over three years, Lam Soon (Hong Kong) Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We compared total CEO remuneration at Lam Soon (Hong Kong) 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.

However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Lam Soon (Hong Kong) shares (free trial).

If you want to buy a stock that is better than Lam Soon (Hong Kong), 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.