Dominic Ng has been the CEO of East West Bancorp, Inc. (NASDAQ:EWBC) since 1992. 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.
How Does Dominic Ng's Compensation Compare With Similar Sized Companies?
According to our data, East West Bancorp, Inc. has a market capitalization of US$5.6b, and pays its CEO total annual compensation worth US$7.6m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.9m.
So Dominic Ng receives a similar amount to the median CEO pay, amongst 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.
You can see a visual representation of the CEO compensation at East West Bancorp, below.
Is East West Bancorp, Inc. Growing?
Over the last three years East West Bancorp, Inc. has grown its earnings per share (EPS) by an average of 18% per year (using a line of best fit). Its revenue is up 11% over last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has East West Bancorp, Inc. Been A Good Investment?
With a total shareholder return of 12% over three years, East West Bancorp, Inc. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
Dominic Ng is paid around what is normal the leaders of comparable size companies.
Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. So considering these factors, we think the CEO pay is probably quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling East West Bancorp (free visualization of insider trades).
Important note: East West Bancorp 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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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.