Wai Sing Wong became the CEO of Newtree Group Holdings Limited (HKG:1323) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Wai Sing Wong's Compensation Compare With Similar Sized Companies?
Our data indicates that Newtree Group Holdings Limited is worth HK$1.6b, and total annual CEO compensation was reported as HK$9.9m for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at HK$1.7m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of HK$777m to HK$3.1b. The median total CEO compensation was HK$2.3m.
Thus we can conclude that Wai Sing Wong receives more in total compensation than the median of a group of companies in the same market, and of similar size to Newtree 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 a visual representation of the CEO compensation at Newtree Group Holdings, below.
Is Newtree Group Holdings Limited Growing?
Newtree Group Holdings Limited has increased its earnings per share (EPS) by an average of 103% a year, over the last three years (using a line of best fit). It saw its revenue drop 9.3% over the last year.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. 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 Newtree Group Holdings Limited Been A Good Investment?
Newtree Group Holdings Limited has generated a total shareholder return of 17% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared the total CEO remuneration paid by Newtree Group Holdings Limited, and compared it to remuneration at a group of 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. We also note that, over the same time frame, shareholder returns haven't been bad. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. Whatever your view on compensation, you might want to check if insiders are buying or selling Newtree Group Holdings shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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