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Is Dream International Limited (HKG:1126) Excessively Paying Its CEO?

Simply Wall St

Kyoo Choi has been the CEO of Dream International Limited (HKG:1126) since 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Dream International

How Does Kyoo Choi's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Dream International Limited has a market cap of HK$2.5b, and reported total annual CEO compensation of HK$7.9m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at HK$5.7m. We examined companies with market caps from HK$1.6b to HK$6.2b, and discovered that the median CEO total compensation of that group was HK$2.6m.

It would therefore appear that Dream International Limited pays Kyoo Choi 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 better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Dream International has changed over time.

SEHK:1126 CEO Compensation, December 23rd 2019

Is Dream International Limited Growing?

On average over the last three years, Dream International Limited has grown earnings per share (EPS) by 13% each year (using a line of best fit). In the last year, its revenue is up 21%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Dream International Limited Been A Good Investment?

Most shareholders would probably be pleased with Dream International Limited for providing a total return of 87% over three years. 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 examined the amount Dream International Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying Dream International shares with their own money (free access).

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.

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.

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. Thank you for reading.