In 2015 Tun Cheng was appointed CEO of Symphony Holdings Limited (HKG:1223). 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Tun Cheng's Compensation Compare With Similar Sized Companies?
According to our data, Symphony Holdings Limited has a market capitalization of HK$2.8b, and paid its CEO total annual compensation worth HK$2.6m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at HK$2.4m. We looked at a group of companies with market capitalizations from HK$1.6b to HK$6.2b, and the median CEO total compensation was HK$2.6m.
So Tun Cheng is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Symphony Holdings has changed from year to year.
Is Symphony Holdings Limited Growing?
Over the last three years Symphony Holdings Limited has grown its earnings per share (EPS) by an average of 53% per year (using a line of best fit). Its revenue is down 2.2% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Symphony Holdings Limited Been A Good Investment?
Boasting a total shareholder return of 37% over three years, Symphony Holdings Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Tun Cheng is paid around what is normal the leaders of comparable size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Symphony Holdings.
Important note: Symphony Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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