In 2001 Sem Gan was appointed CEO of V.S. International Group Limited (HKG:1002). 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 - 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 Sem Gan's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that V.S. International Group Limited has a market cap of HK$228m, and is paying total annual CEO compensation of CN¥2.1m. (This number is for the twelve months until July 2018). While we always look at total compensation first, we note that the salary component is less, at CN¥1.7m. We looked at a group of companies with market capitalizations under CN¥1.3b, and the median CEO total compensation was CN¥1.3m.
It would therefore appear that V.S. International Group Limited pays Sem Gan more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at V.S. International Group has changed from year to year.
Is V.S. International Group Limited Growing?
V.S. International Group Limited has increased its earnings per share (EPS) by an average of 5.7% a year, over the last three years (using a line of best fit). Its revenue is down -35% over last year.
I would prefer it if there was revenue growth, but I'm happy with the EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has V.S. International Group Limited Been A Good Investment?
With a three year total loss of 77%, V.S. International Group Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at V.S. International Group 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.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. Whatever your view on compensation, you might want to check if insiders are buying or selling V.S. International Group shares (free trial).
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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